a. Now let's imagine that people wake up one morning, see their shadows, become frightened and decide that they want to hold moremoney. How could represent this in our model? (I have a specific change in a specific variable in mind.)

b. What probably happens to consumption and investment here? Show the effect of this in the short run on AS/AD graph. What happens to output and unemployment? BTW, what kind of unemployment are we talking about here? (Assume wages are sticky in the short run.)

c. Show the result of this in the long run if wages unstick. What will happen to nominal wages in the long run?

d. Let's say the central bank wants to prevent the effects in part b and c. What should they do? Show the result of this on an AS/AD graph.

Please draw graphs and write/type steps neatly.