1.In this question, we are going to use AS-AD model that you have learned in to analyze the impacts of the COVID-19 pandemic on the economy of the US and then test the predictions of the model by real data.

a.By using AS-AD model show the impacts of the pandemic on the economy of the US on GDP, price level, and unemployment rates in the short-run. Explain your answer.

b.Under section 1, by using "Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product"

Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product [Percent] Seasonally adjusted at annual rates Last Revised on: January 28, 2021 - Next Release Date February 25, 2021 2018 2019 2020 Line Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Gross domestic product 3.8 2.7 2.1 1.3 2.9 1.5 2.6 2.4 -5.0 -31.4 33.4 4.0 Personal consumption expenditures 2.0 3.2 2.7 1.6 1.8 3.7 2.7 1.6 -6.9 -33.2 41.0 2.5 Goods 2.1 4.2 2.8 2.6 2.5 7.7 4.2 0.6 0.1 -10.8 47.2 -0.4 Durable goods 4.0 7.1 3.2 2.5 1.0 12.7 6.3 3.1 -12.5 -1.7 82.7 0.0 UI A Nondurable goods 1.1 2.8 2.7 2.6 3.3 5.3 3.1 -0.7 7.1 -15.0 31.1 -0.7 Services 2.0 2.7 2.6 1.1 1.5 1.9 2.0 2.0 -9.8 -41.8 38.0 4.0 00 0 Gross private domestic investment 11.0 -1.1 10.2 3.9 3.9 -5.8 1.8 -3.7 -9.0 -46.6 86.3 25.3 Fixed investment 8.5 4.4 0.8 2.6 2.9 -0.4 2.4 1.0 -1.4 -29.2 31.3 18.4 9 Nonresidential 12.2 6.2 2.6 5.0 4.2 0.0 1.9 -0.3 -6.7 -27.2 22.9 13.8 10 Structures 21.6 5.0 -5.9 -12.6 8.2 1.6 3.6 -5.3 -3.7 -33.6 -17.4 3.0 11 Equipment 10.1 2.4 6.1 9.6 2.0 -3.8 -1.7 -1.7 -15.2 -35.9 68.2 24.9 12 Intellectual property products 8.8 12.3 4.4 12.1 4.5 4.1 5.3 4.6 2.4 -11.4 8.4 7.5 13 Residential -3.3 -1.7 -5.4 -5.2 -1.7 -2.1 4.6 5.8 19.0 -35.6 63.0 33.5 14 Change in private inventories 15 Net exports of goods and services --- --- 16 Exports 2.7 1.9 -5.2 2.8 1.8 -4.5 0.8 3.4 -9.5 -64.4 59.6 22.0 17 Goods 1.3 8.5 -8.4 4.3 3.9 -9.1 3.1 2.5 -2.7 -66.8 104.3 31.1 18 Services 5.4 -9.6 1.3 0.1 -2.0 4.9 -3.2 5.1 -20.8 -59.6 -0.5 4.3 19 Imports 0.3 -0.1 8.0 4.1 -2.1 1.7 0.5 -7.5 -15.0 -54.1 93.1 29.5 20 Goods 1.5 -0.1 9.1 3.2 -2.7 0.1 0.7 -9.4 -11.4 -49.6 110.2 30.8 21 Services -4.6 -0.1 3.3 8.4 0.6 9.0 -0.7 0.9 -28.5 -69.9 24.9 22.2 Government consumption expenditures and 22 1.5 2.9 2.5 -0.9 2.5 5.0 2.1 2.4 1.3 2.5 -4.8 -1.2 gross investment 23 Federal 1.9 3.5 4.5 1.9 1.3 9.2 4.8 4.0 1.6 16.4 -6.2 -0.5 24 National defense -0.5 5.7 5.4 6.4 5.6 4.4 5.6 6.6 -0.3 3.8 3.2 5.0