Use the Aggregate Demand-Aggregate Supply Model to illustrate what happens to US output and the price level in both the short-run and the long-run for each of the following. Begin with a long-run equilibrium, and use a separate graph for each.
a. There is a decrease in expected income in the future
b. A major oil spill causes the price of oil to suddenly double
c. There is an economic boom in Canada, which is a major trading partner of the US
d. Labor costs fall dramatically throughout the US due to decreased union membership nationwide
e. Cell phones are banned in the workplace nationwide and productivity increases as a result
f. The value of the dollar increases