Use the following to answer questions :
Figure: Monetary Policy I 
-(Figure: Monetary Policy I) Look at the figure Monetary Policy I. If the economy is initially in equilibrium at E1 and the central bank chooses to buy Treasury bills, _____ shift to _____ a(n) _____ gap.
Definitions:
Cost of Goods Sold
Cost of goods sold (COGS) is the direct cost attributed to the production of the goods sold by a company, including the material and labor expenses.
Gross Profit
The distinction between sales income and the expense of goods sold prior to subtracting overhead costs, wages, taxes, and interest charges.
Periodic
Relating to or occurring at regular intervals; in accounting, it may refer to methods or adjustments made at regular intervals, such as the Periodic Inventory Method.
Inventory Method
An accounting approach used to value inventory, including procedures like First-In, First-Out (FIFO) or Last-In, First-Out (LIFO).
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