Q33. Using aggregate demand and aggregate supply, explain what happens in the short run if the economic recession oversea decreases the U.S. exports.Be sure to detail what happens to aggregate demand, the price level, the level of GDP, and unemployment. Assume that the economy was initially at full employment.***If you have any trouble to draw a graph, you can answer the question without a graph.If then, your answer should include all the necessary steps (i.e., a shift in AD or SRAS or change in equilibrium GDP & equilibrium price ), not just the final outcome.

a. With an AD and AS graph, illustrate and briefly explain the short-run effects of the economic recession abroad on the equilibrium real GDP and the price level.

b. The Federal Reserve tries to solve the economic problems by conducting theopen market operation (i.e., buying or selling government bonds).Illustrate in the graph and briefly explain how the monetary policy could solve its potential problems in the economy.