The tables below show hypothetical money demand and supply schedules as well as aggregate demand and aggregate supply schedules for an economy whose natural unemployment rate is estimated to be 7% Nominal Interest quantity Demanded quantity Supplied Price Level Rate (X) ($ billions) (Om) ($ billions) (5me) (2012 = 100) (2012 $ billlions] (2412 4 billions) 550 200 4 150 110 a. Suppose the economy is facing an unemployment rate of 8.5%, and a declining rate of inflation. Because this economy is facing an) [(Click to select) | gap its central bank should use alm) (Click to select) | monetary policy b. The steps by which this monetary policy will affect the economy are as follows, The Bank of Canada [(Click to select) |government bonds. This [Click to select) . banks' excess reserves and (Click to select] v|the money supply. With the resulting (Click to select) | in the equilibrium nominal interest rate, investment and consumption spending on durables (Click to select) . Aggregate demand shifts to the [(Click to select) w|which means the equilibrium price level (Click to seled) y and equilibrium output (Click to select) w , The (Click to select) | gap therefore (Click to select) w