(Solved): Consider the following business cycle model (a) Identify the different stages of the cycle labelled ...

Consider the following business cycle model (a) Identify the different stages of the cycle labelled A, B, C and D on the diagram. Comment on th levels of GDP, unemployment and inflation at Point \( A \) and at Point \( C \). ( 4 marks) (b) What kind of fiscal policy should be iimplemented at Point A? Briefly explain why and give an example of how this might be done. ( 3 marks) (c) What kind of monetary policy should be implemented at Point \( C \) ? Briefly explain why and giv an example of how this might be done. ( 3 marks)