2. Answers the following questions by referring to the diagram below which shows the current macroeconomic situation for the economy of Candia LRAS SRAS Y. Y AD Candia in a recessionary or expansionary output gap? Explain how you know and what is true about unemployment in this economy h. Explain whether expansionary or contractionary fiscal policies would be appropriate in this situation. Provide examples of the respective types of policies and explain how each would help the economy achieve its goals. Illustrate on the diagram the impacts of the types of policies you identified in part b. Make sure to label curves and values clearly d. Explain by referring to the diagram how the graphical changes you illudrated in part c. impact aggregate output and the unemployment rate