KIN AD Real GDP (Y) Suppose the spread of democracy around the world increases consumer confidence in Canada. a. Drag the appropriate line in the correct direction to show the short-run effect on the AS-AD model. This will: reduce output and lower the price level. O Increase output and raise the price level. O reduce output and raise the price level. O Increase output and lower the price level. b. Suppose the government takes no action to help the economy. Eventually, the price level [returns to its initial value ] and output [returns to its initial value c. Suppose, Instead, the government decides to take action to help the economy. The government can recommend: O raising taxes and/or cutting spending. O cutting taxes and/or raising spending. O cutting taxes and/or cutting spending. O raising taxes and/or raising spending. d. If Canadian government makes the appropriate policy response, what happens to price levels and output in the long run. In the long run, the price level (Click to select) and output (Click to select) Price o