If an Economy Adjusts to Potential GDP Accompanied by a Rising

Multiple Choice

If an economy adjusts to potential GDP accompanied by a rising price level and a falling output level,

A) all of the following are correct
B) an active approach to correcting a contractionary gap is being used
C) an active approach to correcting an expansionary gap is being used
D) a passive approach to correcting a contractionary gap is being used
E) a passive approach to correcting an expansionary gap is being used