Question 5 (20 marks) For each of the following, use an AD-AS diagram to show the short-run and long-run effects on output and ination. Assume the economy starts in long-run equilibrium. a. A decrease in consumer condence that leads to lower consumption spending. (4 marks) I). An increase in taxes. (4 marks) c. An easing of monetary policy by the Fed (a downward shift in the policy reaction function). (4 marks) (1. Now, in addition to the increase in consumer spending, suppose that the economy experiences a favourable inflation shock (a sharp drop in oil price). (4 marks) e. A war that raises government purchases. (4 marks)