in details please

close the output gap? 3) (30 pts) From the following graph, identify the initial equilibrium, the short-run equilibrium, and the long-run equilibrium based on the scenarios below. Explain your answers and identify what happened to the price level and aggregate output. Scenario 1. The economy is initially in long-run equilibrium at point A, and a cost shock causes cost- push inflation. The government reacts by implementing an expansionary fiscal policy. Scenario 2. The economy is initially in long-run equilibrium at point A, and an increase in government purchases causes demand-pull inflation. In the long run, wages respond to the inflation. Scenario 3. The economy is initially in long-run equilibrium at point C, and the federal government implements an increase in corporate taxes and personal income taxes. In the long run, firms and workers adjust to the new price level and costs adjust accordingly. Scenario 4. The economy is initially in long-run equilibrium at point C, and energy prices decrease significantly. The government reacts by implementing a contractionary fiscal policy. AS (Long run) AS, (Short run) AS2 (Short run) P2 Price level, P B AD AD2 Yo Y2 Aggregate output (income), Y 4) (20 pts) If there is a change in expected inflation and the natural unemployment rate, how does it affect the short-run and long-run Phillips curves? Explain the effects of these changes for these two time periods separately, using also graphical analysis