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Assume a post-coronavirus pandemic full-employment scenario in Germany as shown below. And that the left-wing parties in Germany take power later this year. Accordingly, they

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Assume a post-coronavirus pandemic full-employment scenario in Germany as shown below. And that the left-wing parties in Germany take power later this year. Accordingly, they increase government spending, and transfer payments to households, which increases consumption spending. (3 points; 0.75 points per question) (a) Show the effect of these events on German aggregate demand curve in the short run using the diagram below. (- LRAS SRAS P AD Y* Y=GDP

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