Given following information about the economy, determine the appropriate economic policy as well as the expected impact of the policy. Percent change in GDP -8.9% Unemployment rate 9.1% Inflation -0.7% Economy is in a recession so expansionary policy should be used. The fed should buy bonds, which would lower interest rates and cause the AD curve to shift to the rights The economy is in a recession so contractionary policy should be used. The Fed should sell bonds, which would increase interest rates and cause the AD to shift to the left. The economy is overheated so contractionary policy should be used. The fed should sell bonds which would increase interest rates and cause AD to shift to left The economy is overheated so expansionary policy should be used. Fed should buy bonds which would lower interest rates and cause the AD curve to shift to the rights