Assume we start at full-employment output in our AD-AS model. Now, assume that the stock market booms and this causes a rise in investment and consumption.

a) How would this affect prices and output in the short-run? Graph it please and carefully explain why prices and output change the way they do (use only AD-AS model).

b) How would this affect prices and output in the long run? Again, graph it and carefully explain why prices and output change the way they do (use only AD-AS model).