Ques 1. Answer the following:

Using the theory of monetary policy, what should the Bank of Canada do right now to close any GDP gaps. First describe what kind of GDP Gap the economy is currently in. Be specific on how they would accomplish their goals. Pick a Monetary Tool described in the text and slides, and thoroughly describe the process involved in how the Bank of Canada would use that tool to close the gap you indicated. Explain if there are any changes in bank reserves and money supply or interest rates in your steps.