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The graph below shows the AD-AS diagram for Slovenia.

100200300400500600700800900100011001200100200300400500600700800900100011001200Real GDPPrice LevelADSRASLRAS

What type of the GDP gap is observed in Slovenia?

 

The graph below shows the AD-AS diagram for Spain.

100200300400500600700800900100011001200100200300400500600700800900100011001200Real GDPPrice LevelADSRASLRAS

What type of fiscal policy should the government of Spain be implementing to bring the economy to the long-run equilibrium?

 

The graph below shows the AD-AS diagram for Slovenia.

100200300400500600700800900100011001200100200300400500600700800900100011001200Real GDPPrice LevelADSRASLRAS

What type of fiscal policy should the government of Slovenia implement to bring the economy to the long-run equilibrium?