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Permanent negative supply shock

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Reference no: EM131431811

Question 1: Using the AS-AD model, show what happens when a permanent negative supply shock hits the economy. Be sure to label all curves, axes and initial/?nal equilibria.

Question 2: Using the AS-AD model, show what happens when a temporary negative supply shock hitsthe economy. Be sure to label all curves, axes and initial/?nal equilibria.

Question 3: Suppose government spending increases. Using the AS-AD model, show what happens to theeconomy. Label all curves, axes and initial/?nal equilibria.

Reference no: EM131431811

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