1. How would a Keynesian economist use fiscal policy to fix a recession? Specifically, state what should happen to taxes and government spending in this case?
2. How would a Keynesian economist recommend using the reserve ratio (or reserve requirement), the discount rate, and buying or selling bonds to fix inflation?
3. 1. Draw a graph of the economy in equilibrium, using the regular downward sloping Aggregate Demand and upward sloping Aggregate Supply diagram. Make sure you label everything - what is on the horizontal axis, what is on the vertical axis, the equilibrium GDP (V) and the equilibrium P.
   2. Suppose that the economy you just drew is in a recession. As a policy advisor, you want to use expansionary fiscal policy to fix the recession. Write what does an expansionary fiscal policy mean, and then, what will that do to the graph you just drew. Show what happens to the graph now, in terms of explaining which curve will shift which way, and what will happen to the equilibrium price and equilibrium GDP? Show this graphically and also in written words. (Make sure you label everything - the curves, the axes and the equilibriums.)