LRAS SRAS, Assume that the economy is initially in equilibrium at potential GDP. Suppose that there is a decrease in income in Europe that causes a decrease in demand for U.S. produced goods. Use an AD AS graph to show the effect of the decline in income in Europe on output and the price level in the United States in the short run and in the long run. 1.) Using the line drawing tool, show the effect of the decline in income in Europe on output and the price level in the United States in the short run. Properly label your curve. 2.) Using the point drawing tool, plot the economy's new short-run equilibrium. Label the point 3.) Using the line drawing tool, show the long-run adjustment that occurs as a result of the decline in income in Europe. Property label your curve 4.) Using the point drawing tool, plot the economy's new long run equilibrium. Label the point E3 Carefully follow the instructions above, and only draw the required objects Aggregate output, Y LRAS SRAS, Assume that the economy is initially in equilibrium at potential GDP. Suppose that there is a decrease in income in Europe that causes a decrease in demand for U.S. produced goods. Use an AD AS graph to show the effect of the decline in income in Europe on output and the price level in the United States in the short run and in the long run. 1.) Using the line drawing tool, show the effect of the decline in income in Europe on output and the price level in the United States in the short run. Properly label your curve. 2.) Using the point drawing tool, plot the economy's new short-run equilibrium. Label the point 3.) Using the line drawing tool, show the long-run adjustment that occurs as a result of the decline in income in Europe. Property label your curve 4.) Using the point drawing tool, plot the economy's new long run equilibrium. Label the point E3 Carefully follow the instructions above, and only draw the required objects Aggregate output, Y