AB 204 Unit 9 Assignment Monetary and Fiscal Policy, Macroeconomic Fl AB 204 Unit 9 Assignment Monetary and Fiscal Polic

AB 204 Unit 9 Assignment Monetary and Fiscal
Policy, Macroeconomic Fluctuations and
Macroeconomic Equilibrium
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1. Refer to the sets of the aggregate demand, short-run aggregate
supply, and long-run aggregate supply curves. Use the graphs to explain
the process and steps by which each of the following economic
scenarios will shift the economy from one long-run macroeconomic
equilibrium to another equilibrium. Under each scenario, elaborate the
short-run and long-run effects of the shifts in the aggregate demand
and aggregate supply curves on the aggregate price level and aggregate
output (real GDP).
Suppose the household wealth decreases due to a decline in the stock
market asset prices (See the set of graphs below and pay attention to
the 3-stage shifts in graphs).