Suppose the economy is experiencing an inflationary gap.

a. Draw a graph showing aggregate demand, short-run aggregate supply, and long-run aggregate supply. Label both axes, all curves, and the inflationary gap. Label the actual output level as Y₁, the actual price level as PL₁, and the full employment output level as Y_f.

b. Explain one specific contractionary fiscal policy that could eliminate the inflationary gap.

c. Show how the policy you explained in part b would change your graph if the policy were successful.