Part 2 - Draw It Again - For each of the following scenarios show the effect on AD , SRAS , and LRAS Label the initial price level PL , and the new price level and output , PL, and Y,. Start each graph in either a positive or a negative output gap , depending on the scenario 7. To combat a recession , Congress passed the 8. In 2018 with unemployment at 4.1 % , the Tax Economic Stimulus Act of 2008 Cuts and Jobs Act of 2017 went into effect 9. Still feeling the effects of the Great Depression 10. To fight stagflation in the 1979 , Paul Volcker the US increased military spending and entered the Chairman of the Federal Reserve , increased World War 2 in 1941 interest rates to lower consumption Part 3 - Stretch Your Thinking - Answer the question 11 . Inflation can be caused by changes in aggregate demand (demand -pull ) or changes in aggregate supply (cost -push ). In your opinion , which of these two are worse for the overall economy ? Explain your reasoning