The following table shows the aggregate demand and aggregate supply schedules for the economy of Port au Prince.

Aggregate Quantity Demanded	Price Index	Aggregate Quantity Supplied
$125	65	$95
115	70	100
105	75	105
95	80	110
85	85	115
75	90	120

a) If potential GDP is 65, is this economy in a long run equilibrium? How do you know? (2 marks) b) If the price level were 80, would there be a surplus or a shortage? How much? (2 marks)

c) Does there exist a recessionary gap or an inflationary gap? How do you know? (2 marks)

d) If the government were to use fiscal policy to stabilize this economy, what kind would it use? In your answer, you are required to specifically address TWO TOOLS OF FISCAL POLICY AND HOW THEY WOULD BE USED TO STABILIZE THE ECONOMY. (4 marks)