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please show all the work! thank you! Fiscal Policy Portfolio This portfolio is similar to the type of question you may see on the AP

please show all the work! thank you!

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Fiscal Policy Portfolio This portfolio is similar to the type of question you may see on the AP Exam. Make sure to label all graphs correctly. Assume a country is operating in full employment. 1. Draw a correctly labeled aggregate demand and aggregate supply graph and show each of the following: a. The long run aggregate supply curve b. Current price level and output levels labeled Ple and Ye 2. Assume that consumer wealth increases. On the same graph you already drew, go back and show the effects of this scenario on each of the following: a. Aggregate Demand (label as AD, ) b. Output (label as Y, ) c. Price Level (label as P, ) 3. Identify one fiscal policy action that can resolve this problem and how it will change Aggregate Demand 4. Using a correctly labeled Loanable Funds Market graph, show the effects of the policy you identified in part 3 on real interest rates 5. Given the change in the real interest rates in part 4, what is the impact on each of the following? a. Investment spending. Explain b. International Value of the dollar Explain c. Identify the change to Net exports as a result of the changing international value of the dollar 6. What if the government had not taken the policy action in part 3? In the long run what will happen to SRAS

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