Please see attached question.

EXHIBIT 2 Price LRAS level SRAS P1 - - - A AD1 YF Y1 Real GDP be if the self-correcting mechanism worked, then shift aggregate demand consistent with the impact of the policies enacted. d. What has been the effect of this policy? If these timing problems happen frequently, does it suggest that fiscal policy works to stabilize or destabilize the economy?2. Use the diagram given in Exhibit 2 to answer the following questions. a. Is the economy depicted (at point A) in a recession, a boom, or at full employment? b. According to the Keynesian view, what should be done with government taxes and/or spending to restore full employment? Is this consistent with running a budget deficit, a budget surplus, or a bal- anced budget? Suppose these policies are enacted, but during the time it takes for the impact of these policies to be felt, the economy has already self-corrected. First, show in the diagram where the economy would