Problem 4: The hypothetical information in the following table shows what the values for real GDP and the price level will be in 2017 if the Fed does not use monetary policy: Year Potential GDP Real GDP (trillion) Price level (trillion) 2016 $17.7 $17.7 114 2017 $18.1 $17.9 116 a. If the Fed wants to keep real GDP at its potential level in 2017, should it use an expansionary or contractionary policy? Should the Fed buy or sell Treasury bills? b. Suppose the Fed's policy is successful in keeping real GDP at its potential level in 2017. States whether each of the following will be higher or lower if the Fed had taken no action. I. Real GDP II. The inflation rate III. The Unemployment rate c. Draw an aggregate demand and aggregate supply graph to illustrate your answer. Be sure that your graph contains LRAS curves for 2016 and 2017; AD curves for 2016 and 2017; with and without monetary policy action; and equilibrium real GDP and the price level in 2017, with and without policy. Activa