Question: Based on the figure below, with the blue line representing actual GDP and the white line denoting potential GDP , which best analyzes the economic
Based on the figure below, with the blue line representing actual GDP and the white line denoting potential GDP which best analyzes the economic environment from through and what policy andor changes the Central Bank would most likely pursue during this period There was initially a large positive output gap that gradually closed during the period so the Central Bank would most likely pursue a gradually decreasing accommodative policy to slowly contract the economy. There was initially a large negative output gap that gradually closed during the period so the Central Bank would most likely pursue a gradually decreasing accommodative policy to slowly expand the economy Click to openclose chart There was initially a large negative output gap that gradually widened during the period so the Central Bank would most likely pursue an increasing restrictive policy to slowly contract the economy.
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