LRAS P SRAS2 3 SRAS 4 2 AD2 AD1 Yp Real GDP Start at equilibrium point 4 The economy is in a(n) (recessionary gap, inflationary gap) recessionary gap For fiscal policy, the government should (increase, decrease) government spending. With this fiscal policy the new equilibrium is (1, 2, 3, 4) With this new equilibrium the price level (rises, falls)With this new equilibrium the price level (rises, falls] l l r With this new equilibrium real GDP (rises: falls) l l \"V For each box, he sure to write your selections to exactly match one of the choices given