1. Economic indicators Use the following table to determine whether each scenario describes an economic growth indicator or an inflation indicator, and then whether the Fed would use restrictive or stimulative monetary policy in response to the scenario to fulfill is dual mandate of sustainable growth and low ination. Scenario Indicator Type Inflation Monetary Policy Type Restrictive Over 4 months, national income increases by 3% Economic Growth Stimulative Over 5 months, the Industrial Production Index increases by 7% Economic Growth Restrictive Over 6 months, the consumer Price Index decreases by 49 Over 5 months, Gross Domestic Product increases by 5% The following graph shows the real GDP and unemployment rate over time, in a hypothetical economy. Business Cycle Unemployment Rate REAL GDP (Dollars) Real GDP TIME indicator because the peaks and troughs from the unemployment rate curve According to the graph, the unemployment rate is a occur peaks and troughs in real GDP