1. We know that the AS curves has three zones (ranges) in the short run. Name the three zones and describe what occurs to the price level and output/real GDP in each zone(range).

2.Contractionary fiscal policy is used during a certain time/point in the business cycle. Describe when in the business cycle contractionary fiscal policy would be applied and by whom? Also, which fiscal policy tools would be deployed and exactly how would they to fight the recessionary gap?