Macro topic 5.1

Macro Unit 5: Consequences of St Topic 5.1- Fiscal and Monetary Policy in the Short Run To 1. Use the chart to summarize how fiscal policy, monetary 1. policy, and no policy can close negative and positive output gaps. Identify if the policy shifts AD or SRAS. Policy Negative Positive Output Output Gap Gap Fiscal Policy Monetary Policy No Policy 2. What action could the central bank take to limit inflation caused by expansionary fiscal policy? Explain