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Please assist with part B (Monetary Policy) of this. Suppose that the economy starts at a long-run equilibrium. Now suppose there is an increase in

Please assist with part B (Monetary Policy) of this.

Suppose that the economy starts at a long-run equilibrium. Now suppose there is an increase in government spending. No Policy Intervention; Monetary Policy: Using the model of aggregate demand and aggregate supply and the Phillips curve illustrate graphically the impact in the short run and in the long run of this government increase. Be sure to label the axes, the curves, the initial equilibrium values, the direction the curves shift, the short-run equilibrium values, and the long-run equilibrium values. Explain what happens to prices and output in short-run and the long run.

I have already done part A which is "Increase in Government Spending with No Policy Intervention" I am not sure how to do the graph for part B "Increase in Government Spending with Monetary Policy" I need to describe the movements and shifts as well. Please & Thank You!

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Example # 6: Increase in Gout . Spending ( WILL BE ON EXAM ) a. - No Policy Intervention / b. - Monetary Policy P LRPC LRAS SRASH SRASO C B B 7 ADJ PCt ADD PC GU 1 2 = YN YA UHR UN = U2 A IF GT = > AD shifts right => PT & YT, A Since PT => TTT & since YT = > .... = 7 UV = > movement along PC => Point B, SR equilibrium | No Policy Intervention => PE A Since PT as A -7 B = > PET = > ( P - PE ) v => SRAS shifts left => PT & y back to YN * Since PT => TTT & since y => UT back to UN = PC shifts right

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