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For the following economic change, first explain with words the short-run adjustments you would expect to see in aggregate supply and aggregate demand, indicating the type of short-run gap created. Second, explain with words what will change in the adjustment process from short-run to long-run. Assume we start at equilibrium, and that potential GDP is unaffected by these changes. Following the stock market crash in October 1929, the Canadian government adopted an austerity program, drastically reducing government expenditure. In the short run, The AS curve will The AD curve will GDP will The price level will A/an output gap is created. In the long run, Wages and other factor prices will The AS curve will GDP will The price level will