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(6 points) Please review Section 13.5 of the book and/or the slides posted on Canvas. Afterward, explain the effects of the following events in your
(6 points) Please review Section 13.5 of the book and/or the slides posted on Canvas. Afterward, explain the effects of the following events in your own words: (a) A shock to prices. (b) A disinflation shock. (c) An aggregate demand shock. Keep in mind that these events are explained in the book, and I have included notes on the slides. For each event, assume that the economy begins in a steady state. In your explanations, include: Supply and demand diagrams. Include a graph illustrating the evolution of the following variables over time: Inflation, short-run output, and nominal interest rate. Each of these graphs should have the relevant variable on the vertical axis and time on the horizontal axis
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