Question: 1. Suppose the long-run and short-run aggregate demand are intersecting the AD at the same position, if the government increases the stock of infrastructure, what

1. Suppose the long-run and short-run aggregate demand are intersecting the AD at the same position, if the government increases the stock of infrastructure, what will happen to real output and the price level? Show graphically shifting the correct aggregate supply curve(s).

2. Suppose the long-run and short-run aggregate demand are intersecting the AD at the same position, if the cost of shipping goods, both final and intermediate, increases what will happen to real output and the price level? Show graphically shifting the correct aggregate supply curve(s).

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