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.

4. Lower interest rates make borrowing money for capital investments more attractive to

businesses.

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

The United States Economy PL LRAS SRAS Pe AD Yfe rGDP