Question: please show all required work! Thank you so much : ) Monetary Policy Portfolio This portfolio is similar to the type of question you may

please show all required work! Thank you so much : )

Monetary Policy Portfolio This portfolio is similar to the type of question you may see on the AP Exam. Make sure to label all graphs correctly. Assume the United States had been at full employment, that Mexico and the United States are trading partners and recently, US goods have become less popular in Mexico. 1. Based on the change indicated above, identify if the US is now operating below, at or above full employment. 2. Based on your answer to #1, draw a correctly labeled aggregate demand and aggregate supply graph and show each of the following: a. The long run aggregate supply curve (label full employment output as Yf) b. Current price level and output levels labeled Ple and Ye I 3. Identify an open market operation that the FED could use to resolve this problem. 4. Using a correctly labeled money market graph with a side-by-side investment demand graph, show the effect of the policy you identified in part B on each of the following: a. nominal interest rates b. quantity of investment demanded 5. On your graph in part 2, go back and show the short-run effects of the action you identified on each of the following: a. Aggregate Demand b. Output c. Price Level 6. Given your answer in part 4, explain what will happen to each of the following:" a. the international value of the dollar b. the nation's exports and imports
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