11) Refer to Figure 18-3. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue A) expansionary fiscal policy. B) contractionary fiscal policy. C) expansionary monetary policy. D) contractionary monetary policy. E) expansionary automatic stabilizers. 12) Which of the following would be most likely to induce Congress and the president to conduct contractionary fiscal policy? A significant A) decrease in oil prices. B) decrease in real GDP. C) increase in inflation. D) increase in labor productivity. 13) If the economy is slipping into a recession, which of the following would be an appropriate fiscal policy? A) an increase in the money supply and a decrease in interest rates B) a decrease in government purchases C) a decrease in taxes D) a decrease in oil prices 14) An appropriate fiscal policy response when aggregate demand is growing at a slower rate than aggregate supply is to cut taxes. 15) If real equilibrium GDP is above potential GDP, expansionary fiscal policy should be pursued. 16) What are the key differences between how we illustrate an expansionary fiscal policy in the basic aggregate demand and aggregate supply model and in the dynamic aggregate demand and aggregate supply model? 17) Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in a long-run macroeconomic equilibrium. For Year 2, graph aggregate demand, long-run aggregate supply, and short-run aggregate supply such that the condition of the economy will induce the president and the Congress to conduct expansionary fiscal policy. Briefly explain the condition of the economy and what the president and the Congress are attempting to do.     18) Refer to Table 18-1. Suppose the economy is in the state described by the table above. What problem will occur in the economy if no policy is pursued? What fiscal policy tools could be used to combat the problem? Draw a dynamic aggregate demand and aggregate supply diagram to illustrate the appropriate fiscal policy to use in this situation.