Question

If aggregate output is below the natural rate level, activists of policies would recommend that the government a. do nothing. b. try to eliminate the high unemployment by attempting to shift the aggregate supply curve to the right. c. try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the right. d. try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the left.

Answer 1

If aggregate output is below the natural rate level, activists of policies would recommend that the government  try to eliminate the high unemployment that could be achieved by shifting the aggregate demand curve to the right instead.

Option b

Explanation:

Out of the given option the third option makes the most sense for activists of a policy to follow. Being activists of the policies, the aggregate output needed to be kept in check, thus to accomplish it, instead of doing nothing that would be suggested by non-activists of the policies.

It would be the most possible for activists to do something in order to reduce the high unemployment which they would try to accomplish by shifting the aggregate demand curve that was formed to a little right, which would get the effect they wanted, which was to keep the aggregate output in check.