According to the Passive Policymaker's Position, Why Would an Expansionary

question 58

Multiple Choice

According to the passive policymaker's position, why would an expansionary gap be eliminated?  

• A) because the short-run aggregate supply shifts to the left 
• B) because the short-run aggregate supply shifts to the right 
• C) because rising prices shift the aggregate demand to the left 
• D) because wages fall relatively quickly

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