2.Assume an economy operates in the intermediate range of its aggregate supply curve.State the direction of shift for the aggregate demand curve or aggregate supply curvefor each of the following changes in conditions.What is the effect on the price level?On real GDP?On employment?

a.The price of crude oil rises significantly (300%, say) raising the price of energy generally.

b.Spending on national defense doubles.

c.Investment spending falls as firms expect slower sales growth.

d.An improvement in technology raises labor productivity.

e.The United States raises exports of new passenger aircraft to China.

3.Identify the three ranges of the aggregate supply curve.Explain the impact of an increase in aggregate demand in