CASE 2: Firms Optimistic About Future Prots. Step 1. Which curve shifts AD or SRAS? Step 2. What is the direction of the shift? Step 3. Show this on your diagram and label the short run equilibrium price P1 and the shortrun equ output Y1. Step 4. Will the unemployment rate increase or decrease? What about the price level? Step 5. a) In the long-run, which curve will shift ~ AD or SRAS? b) What is the direction of the shift? c) Show this on your diagram and label the new long run equilibrium price P2 and the new long-run - output Y2. Step 6. What do you notice about P2 and Y2