Use the following to answer questions :
Figure: Output Gap 
-(Figure: Output Gap) Look at the figure Output Gap. If the economy is producing at Y2, then it has a(n) _____ gap, as _____ real GDP exceeds _____ real GDP, and the Federal Reserve should use _____ monetary policy.
Definitions:
Lower Taxes
A reduction in the amount of taxes imposed by a government, which can encourage economic growth by increasing consumers' and businesses' disposable income.
Aggregate Supply
The total supply of goods and services that firms in an economy are willing and able to sell at a given price level during a specific time period.
Macroeconomic Instability
A condition characterized by large and unpredictable fluctuations in key economic indicators such as GDP, inflation, and unemployment rates.
Aggregate Demand
The total demand for all goods and services within an economy at a given overall price level and in a given time period.
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