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.

6. Education spending by state and federal government is reduced, which over time makes

it harder for firms to higher skilled, qualified workers.

Explain the short-run and long-run consequences of the change described:

The United States Economy PL LRAS SRAS Pe AD Yfe GDP