1.Bringing aggregate demand and long-run aggregate supply together on the same graph, what will happen to the price level and output if the government prints more money?

2.What are the three reasons that the short-run aggregate supply curve is upward sloping?

3.What shifts the short-run aggregate supply curve and why?

4.Illustrate a graph with aggregate demand, short-run aggregate supply and long-run aggregate supply all intersecting. Then, show what happens in the short-run when the government increases spending. What happens to the price level and output in the short-run? Finally, adjust the short-run aggregate supply curve so that we are back in long-run equilibrium. What is the long-run effect of the government spending on output and the price level? Be sure to include your illustrations.

5.What is stagflation? What causes stagflation in the AD/AS model?