As an expert macroeconomist, you have been hired by the federal government to act as a consultant and aid with a national economic situation. The economy is currently facing an inflationary gap.

The Bank of Canada would like you to provide two monetary policy solutions that would shift the short run aggregate demand curve and bring about a long run equilibrium. Using the economic knowledge from this course, provide the two policy solutions that you would suggest and explain how they would close the inflationary gap. (6 Marks = 2 Marks for policies and 4 Marks for explanation)