CHAPTER 27 HOMEWORK 5x2= 10 Points Follow the homework guidelines posted on canvas. Refer the textbook and the power points. Label the graphs properly. 1. llustrate on a graph the effect on output and the price level if there is an increase in aggregate demand along the nearly flat part of the aggregate supply curve. 2. What is the likely impact of expansionary policies when the economy is operating at full capacity on the vertical portion of the AS curve? Illustrate. 3. Using aggregate supply and aggregate demand analysis illustrate with the use of a graph the effect of cost-push inflation on the economy. 4. Explain in detail the differences between demand-pull inflation and cost-push inflation and their impact on the economy. 5. Explain how inflation can be "built into the system."