Suppose a Passive Approach to Policy Is Followed

Multiple Choice

Suppose a passive approach to policy is followed.How would an expansionary gap eventually close?  

A)  Restrictive fiscal policy would be used. 
B)  Restrictive monetary policy would be used. 
C)  Inflation would cure the problem because the price level in an expansionary gap is lower than firms and workers had expected. 
D)  Inflation would cure the problem because the price level in an expansionary gap is higher than firms and workers had expected.