Read each direction below carefully and make certain you fully label any graphs, including equilibrium price level and aggregate output.

(a) An economy is currently operating in long-run equilibrium. Draw a graph of its short-run aggregate supply, aggregate demand, and long-run aggregate supply. Label the equilibrium price level and the full-employment output YF.

(b) Draw a new graph that shows an economy operating with an inflationary gap. Include the SRAS, AD, and LRAS. Label the equilibrium price level, real output level, and full employment output YF.