Answer the questions based on the following information.

The Wolfville economy is currently experiencing an inflationary gap.

• Draw a correctly labeled aggregate demand-aggregate supply graph that illustrates Wolfville's current economy. (2 points)

• The Wolfville government is exploring policy options to reduce the inflation. State TWO specific policies they could consider. (2 points)

• The Wolfville central bank is also exploring policy options. State ONE specific policy they could enact. (1 point)

• The congress of Wolfville is in gridlock and cannot decide upon a policy. Therefore, the central bank decides to use the policy you suggested in Question 3. Using a correctly labeled Money Market Graph, show the impact of your central bank policy. Determine if interest rates have increased or decreased. (3 points)

• On your graph in Question #1, show how the economy has been impacted by the central bank's policy decision.(1 point)

• On a correctly labeled Phillips Curve graph, show the results of the central bank's policy that you enacted in Question #4.(2 points)

• Analyze your graph from Question #6. Determine what happened to the following: (2 points)
• Inflation Rate
• Unemployment Rate