My book does not give much information about expansionary policy or contractionary policy?.

Instructions: Show all your work (use the back of the page or additional scratch paper if necessary) and circle numeric answers including appropriate units (where applicable). On a few problems there will be no work to show, you may just write the answer (to the right). Round answers to two (2) decimal places where appropriate. Please attach scratch (if any) to completed test. Long run Short run aggregate aggregate supply supply Price level Aggregate demand Output or Income [12] 1.) Given the Aggregate Supply - Aggregate Demand graph above:- a.) Sketch and label an AD curve that represents Expansionary Policy. Give an example of how this might happen. b. ) Sketch and label an AD curve that represents Contractionary Policy. Give an example of how this might happen. C.) Sketch and label a new SRAS that represents a negative supply shock. Give an example of how this might happen. d.) Sketch and label a new SRAS that represents positive supply shock. Give an example of how this might happen. Page 1 of 5