For each scenario listed below, start by drawing a fully-labeled Aggregate Supply-Aggregate Demand diagram of an economy in long- run equilibrium. Then, shift the appropriate curve(s) - either AD or SRAS - dictated by the events given. Third, identify the short-run and long-run effects of each event on the price level, P and the real output,
Y.
a. The Federal government increases spending on national defense. b. Suppose that U.S. trading partners (e.g., China or Germany impose a
tax/tariff on US exports to these countries.