Question 1: Price level (GDP deflator, 1996-100) LAS 120 EX 110 100 130 90 0 9.0 SAS AD 9.5 10.0 10.5 11.0 11.5 Real GDP

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Question 1 Price Level Gdp Deflator 1996 100 Las 120 Ex 110 100 130 90 0 9 0 Sas Ad 9 5 10 0 10 5 11 0 11 5 Real Gdp 1 (31.43 KiB) Viewed 36 times

Question 1: Price level (GDP deflator, 1996-100) LAS 120 EX 110 100 130 90 0 9.0 SAS AD 9.5 10.0 10.5 11.0 11.5 Real GDP fritions of 1996 dollar) a. [1 point] Does the country in the above graph have an unemployment or an inflation problem? b. [2 points] What fiscal policy action would you advise the government to take to fix the problem in (a)? c. [2 points] If the government listens to your advice, what will be the effect of that policy action on aggregate demand and supply curves? How will the real GDP and prices respond to the policy change?