Please provide the correct answer, no explanation needed. Shift graphs and answer questions.

2.

2. Problems and Applications Q2 For each of the following scenarios, illustrate the effects of the development on both the short-run and long-run Phillips curves (SRPC and LRPC, respectively). There is a fall in the natural rate of unemployment. (?) LRPC O SRPC LRPC Inflation Rate SRPC Unemployment RateThere is a decline in the price of imported oil. LRPC O SRPC Movement along SRPC Inflation Rate O LRPC SRPC Unemployment RateThere is a rise in government spending. LRPC O SRPC Movement along SRPC O Inflation Rate 0 LRPC SRPC Unemployment RateThere is a decline in expected inflation. LRPC O SRPC LRPC Inflation Rate SRPC Unemployment Rate3. 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 shortrun effect of the fall in government purchases. /'\\ \\Z 0 Aggregate Supply Aggregate Demand El Aggregate Supply Price Level Aggregate Demand Quantity of Output On the following graph, shift a curve or adjust the point to reflect the short-run effect of the fall in government purchases. LRPC O SRPC O Short-Run Outcome Inflation Rate LRPC SRPC Unemployment RateIn the short run, inflation V and unemployment V . 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 reect the change that brings the economy to its long-run state. After the recession is over, the economy faces a V set of inflationunemployment combinations. In the short run, inflation V and unemployment V Now suppose that over ti cted inflation changes in the same direction that actual inflation changes. On both of the preceding graphs, shift the appropriate curve or curves to reect the change that brings the economy to its long-run state. After the recession is over, the economy faces a V set of inflationunemployment combinations. In the short run, inflation V and unemployment V Now suppose that over time, expected inflation cha he same direction that actual inflation changes. On both of the preceding graphs, shift the appropriate curve or curves to reect the change that brings the economy to its long-run state. After the recession is over, the economy faces a V set of inflationunemployment combinations. In the short run, inflation V and unemployment V Now suppose that over time, expected inflation changes in the same direction that actual inflation changes. On both of the preceding graphs, shift the appr e or curves to reect the change that brings the economy to its long-run state. After the recession is over, the economy faces a V set of inflationunemployment combinations. 4. Problems and Applications Q4 Suppose the economy is in a long-run equilibrium, as shown on the following graph. Now suppose a fall in government purchases reduces aggregate demand. On the following graph, shift a curve or adjust the point to reflect the short-run effect of reduction in government purchases. LRPC O SRPC Short-Run Effect Inflation Rate O LRPC SRPC Unemployment RateTrue or False: If the Fed undertakes expansionary monetary policy, it can return the economy to its original inflation rate and original unemployment rate. 0 True 0 False Now, suppose the economy is back in longrun equilibrium, and then the price of imported oil rises. On the following graph, shift a curve or adjust the point to reect the shortrun effect of the increase in the price of oil. /'\\ (-7, LRPC O SRPC O Short-Run Effect O I: Ination Rate LRPC SRPC Unemployment Rate True or False: If the Fed undertakes expansionary monetary policy, it can return the economy to its original unemployment rate but the inflation rate will be higher. 0 True O False 8. Problems and Applications Q8 As described in the chapter, the Federal Reserve in 2008 faced a decrease in aggregate demand caused by the housing and financial crises and a decrease in shortrun aggregate supply caused by rising commodity prices. Starting from a longrun equilibrium, illustrate the effects of these two changes on aggregate supply and aggregate demand on the following graph. Then, on the subsequent graph, indicate what happens on a Phillips-curve diagram. /'\\ '8, LRAS 0 Aggregate Supply Aggregate Demand El Aggregate Supply A Price Level LRAS Aggregate Demand I 1' Long-Run Equilibrium Quantity of Output l i \\_'/' LRPC SRPC El LRPC '1' Ination Rate Long-Run Equilibrium SRPC Unemployment Rate Which of the following is true as a result of the two changes in aggregate demand and aggregate supply? (Note: Do not consider the magnitudes of the shifts given on the preceding graphs. Think only about the directions of the shifts.) Check all that apply. [3 The effect on the price level will be ambiguous. [j The effect on equilibrium output will be ambiguous. C] The inflation rate will rise. 1:] Unemployment will rise. Suppose the Fed responds quickly to these shocks and adjusts monetary policy to keep unemployment and output at their natural rates. On each of the previous graphs, adjust the curve or curves (if necessary) to show the long-run results, and place a black point (plus symbol) on the point representing the new longrun equilibrium. True or False: In these situations, the Fed might choose not to take the course of action you selected because it would lead to a rise in the inflation rate. Q True O False