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(33 marks) The hypothetical information in the following table shows what the situation will be in 2020 if the government does not use fiscal policy.

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(33 marks) The hypothetical information in the following table shows what the situation will be in 2020 if the government does not use fiscal policy. YEAR POTANTIAL GDP REAL GDP PRICE LEVEL 2019 $2.1 trillion $2.1 trillion 111.5 2020 $2.3 trillion $2.1 trillion 113.5 a. If the government wants to move real GDP at its potential level in 2020, should it use an expansionary policy or a contractionary policy? In your answer, make sure you explain whether the government should be increasing or decreasing government purchases and taxes. (10 marks)

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