Assume the economy always starts at "A". For each of the following events, explain the short-run and long-run effects on output and the price level. For each part, draw a AD & AS diagram to illustrate the effects on the economy in terms of output and prices. 1) President Biden signed a $1 trillion infrastructure bill into Law on Nov. 1, 2021, enacting a key piece of his domestic spending agenda that will funnel billions to states and local governments to upgrade outdated roads, bridges, transit systems and more. 2) A technological improvement raises productivity in both short-run and long-run.

Long-run Price Level Aggregate Supply Short-run Aggregate Supply Aggregate Demand Quantity of Output