For each of the following, use an AD-AS diagram to show the short-run and long-run effects on output and inflation. Assume the economy starts in long-run equilibrium. (LO2)

a. An increase in consumer confidence that leads to higher consumption spending.

b. A reduction in taxes.

c. An easing of monetary policy by the Fed (a downward shift in the policy reaction function).

d. A sharp drop in oil prices.

e. A war that raises government purchases.