The task I am struggling with: The accompanying diagram shows the current macroeconomic situation for the economy of Albernia. You have been hired as an economic consultant to help the economy move to potential output Yp. a) Is Albernia facing a recessionary or inflaniotary gap? b) Which type of fiscal policy – expansionary or contractionary – would move the economy of Albernia to potential output Yp? What are some examples of such policies? c) Illustrate the macroeconomic situation in Albernia with a diagram after the succesful fiscal policy has been implemented. Thank you very much for your help.

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