Final answer:
Graphically, the SRAS line shifts to the right in the presence of an expansionary gap, which indicates an increase in real GDP and potential downward pressure on prices.
Step-by-step explanation:
The student asked what happens graphically to the Short-Run Aggregate Supply (SRAS) line in the presence of an expansionary gap. In such a scenario, particularly when considering the Keynesian model, we understand that the SRAS would typically shift to the right due to increases in productivity or other factors. This rightward shift represents an economy that is producing more goods and services; it results in greater real GDP and may sometimes exert downward pressure on the price level, assuming aggregate demand remains unchanged.
However, when we consider productivity gains, the impact of this on the SRAS curve's rightward shift is generally modest over the short run. This is because productivity usually grows by only a few percentage points per year. For a significant shift in the SRAS curve that would close an expansionary gap, policy measures, such as expansionary fiscal policy, could be utilized to help shift aggregate demand.