Equilibrium in the AD/AS Model

Instructions: For each of the following, illustrate and explain the changes to AD and AS, output, price levels and employment that will occur in the short-run and in the long-run. Assume that wages are "sticky" in the short-run and "flexible" in the long-run. 1. An increase in stock prices makes households feel wealthier: The United States Economy PLI LRAS SRAS Pe AD Yfe rGDP Explain the short-run and long-run consequences of the change described above:2. A new trade deal with Mexico leads to lower tariffs on Mexican goods and more imports to the United States. The United States Economy PL LRAS SRAS Pe . . ... . . ...... AD Yfe rGDP Explain the short-run and long-run consequences of the change described above:3. The government raises the minimum wage. The United States Economy PL| LRAS SRAS Pe . . . . . . . AD Yfe rGDP Explain the short-run and long-run consequences of the change described above