Question: Construct a diagram for the economy using AD, SRAS, and LRAS, where the economy has a SR equilibrium of Actual Unemployment = U = 7%,

Construct a diagram for the economy using AD, SRAS, and LRAS, where the economy has a SR equilibrium of

Actual Unemployment = U = 7%, and with a Price Level = 97. (Assume the Natural Rate of

Unemployment

=5%)

Label all curves, axis, and relevant equilibrium points using provided info.

Follow-up short answer question:

- Refer to your prior short answer to the Aggregate Supply& Demand scenario to complete this question.

- Assume the President and Congress decides to use the two tools of discretionary fiscal policy to restore LR/SR equilibrium.

- Eplain the two tools of discrectionary fiscal policy, and how they each contribute to restoring equilibrium. Clearly relate tools to the components and effects on AS and AD

ONLY Looking For the Follow-Up Answers!!!

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