If the Price Level in an Economy Rises and Its

Multiple Choice

If the price level in an economy rises and its output level decreases as it gravitates toward its potential GDP,then:

A) a policy to manipulate the aggregate supply is being used.
B) an active approach to correcting a recessionary gap is being used.
C) an active approach to correcting an expansionary gap is being used.
D) a passive approach to correcting a recessionary gap is being used.
E) a passive approach to correcting an expansionary gap is being used.