Consider for the scenarios described below what happens to the LRAS, AD and SRAS curves and where the price level and real GDP may fall. All else equal, is there upward or downward price pressure? All else equal, how is long-term (potential) GDP affected? All else equal, in the short-term does GDP get a boost or is there a drag on growth? (You may copy and paste the elements of this graph to create your graph reflecting the movement in these curves for each of the following scenarios.)

Price Level LRASO SRASO A.Do Real GDP