1.

(05.01 MC) Which one of the following combinations of fiscal and monetary policies would be used to correct a negative output gap in an economy? (2 points)

	An expansionary fiscal policy that includes reducing taxes and a contractionary monetary policy that includes selling bonds
	A contractionary fiscal policy that includes decreasing government spending and an expansionary monetary policy that includes purchasing of bonds
	An expansionary fiscal policy that includes reducing taxes and an expansionary monetary policy that includes purchasing bonds
	An expansionary fiscal policy that includes decreasing government spending and a contractionary monetary policy that includes selling bonds
	A contractionary fiscal policy that includes increasing taxes and a contractionary monetary policy that includes purchasing bonds

2.

2. (05.01 HC) Use the graph to answer the question that follows. LRAS Price SRAS level K AD1 AD2 Real GDP5. (05.02 MC) Use the graph to answer the question that follows. Unemployment rate 15. (0505 HC) Use the graph to answer the question that follows. Real Interest Rate Quantity of Funds 21. (05.06 MC) Use the graph to answer the question that follows. Capital Goods / Consumer Goods