2. Problems and Applications Q3 Suppose that a fall in government purchases causes a recession. On the following graph, shift one or both curves to reflect the short-run effect of the fall in government purchases. Aggregate Demand Aggregate Supply Price Level Quantity of Output Aggregate Demand Aggregate Supply On the following graph, shift a curve or adjust the point to reflect the short-run effect of the fall in government purchases. SRPC Short-Run Outcome LRPC Inflation Rate Unemployment Rate SRPC LRPC In the short run, inflation and unemployment . Now suppose that over time, expected inflation changes in the same direction that actual inflation changes. On both of the preceding graphs, shift the appropriate curve or curves to reflect the change that brings the economy to its long-run state. After the recession is over, the economy faces a set of inflation-unemployment combinations