n answering the question, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. Country XYZ is in an inflationary gap. Draw a correctly labeled graph showing the short-run and long-run Phillips curves for Country XYZ. Identify how each of the following affects inflation, unemployment, and the short-run Phillips curve. An increase in government spending A drop in inflationary expectations Identify the effect of increased unemployment-insurance benefits on the long-run Phillips curve