Question: Answer entire question pictured below:Blue blank: falls rises Homework(Ch 33) 5. Problems and Applications Q1 Suppose the economy is in a long-run equilibrium, as shown

Answer entire question pictured below:Blue blank: falls rises

Homework(Ch 33) 5. Problems and Applications Q1 Suppose the economy is in a long-run equilibrium, as shown in the following graph. Now suppose that a stock market boom causes aggregate demand to rise. Use your diagram to show what happens to output and the price level in the short run. ? ? LRAS Aggregate Supply Aggregate Demand Aggregate Supply Price Level LRAS Aggregate Demand Quantity of Output As a result of this change, the unemployment rate _ Use the sticky-wage theory of aggregate supply to think about what will happen to output and the price level in the long run (assuming there is no change in policy). On the graph, illustrate the change that will occur in the long run. Grade It Now Save & Continue Continue without saving

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