questions-it's there just for Tolkien fun. Go forth and read!!! I e) Draw expansionary fiscal policy that is applied when the economy is in a recessionary gap using the AD/AS model. What are the two fiscal actions that the government could take to implement this policy? f) Draw contractionary fiscal policy that is applied when the economy is in an inflationary gap using the AD/ AS model? What are the two fiscal actions that the government could take to implement this policy? g) List and briefly describe the five lags that cause problems in implementing fiscal policy. Editx Course Hero X Course Hero X Course Hero X Course Hero X boardcdn.com/5fcfbb471fe01/15636104?X-Blackboard-Expiration=16683840000008X-Blackboard-Signature=%2FBJboAr4hEQamK D Page view A Read aloud T Add text a) Describe a budget deficit, a budget surplus and a balanced budget. Include relationship of tax revenues and government spending. What impact will each have on the market for loanable funds? b) Describe and graph how an income tax affects potential GDP and aggregate supply. Indicate the income tax wedge. (2 graphs) How do taxes on expenditures affect the income tax wedge? c) Draw the Laffer curve. Show where the maximum tax revenues would be. From this point does an increase in tax rates increase or decrease tax revenues? d) Describe the three multipliers for government fiscal policy and describe the differences in size of impact. How does each work to affect the economy? Page 9 of 15 5/23/2018 *Quotes from The Lord of the Rings, or The Hobbit by JRR Tolkien. Nothing written in italics applies to the questions-it's there just for Tolkien fun. Go forth and read!!! e) Draw expansionary fiscal policy that s applied when the economy is in a recessionary gap using the AD/AS model. What are the two fiscal actions that the government could take to implement this policy? f) Draw contractionary fiscal policy that is applied when the economy is in an inflationary gap using the AD/ AS model? What are the two fiscal actions that the government could take to implement this policy? g) List and briefly describe the five lags that cause problems in implementing fiscal policy