Suppose the govemment increases spending on building and repairing highways, bridges, and ports. Using the graph, shift the short-run aggregate suppiy (AS) curve or the aggregate demand (AD) curve to show the short-run impact of the increase in govemment spending. In the short run, the increase in government spending on infrastructure causes the price level to the quantity of output to the natural level of output. The increase in governmen the natural rate of unemployment in the short run. Again, the following graph shows a hypothetical economy experiencing long-run equilibrium at the expecceuprice level of 120 and natural output level of $600 billion, prior to the increase in government spending on infrastructure. Along the transition from the short run to the long run, price-level expectations will and the curve will shift to the Using the graph, liustrate the long-run impact of the increase in government spending by shifting both the aggregate demand (AD) curve and the short-run aggregate suppiy (AS) curve in the appropriate directions. Using the graph, illustrate the Iong-run impact of the increase in government spending by shifting both the aggregate demand (AD) curve and the short-run aggregate supply (AS) curve in the appropriate directions. In the long run, due to the increase in government spending, the price level , the quantity of output the natural level of output, and the unemployment rate the natural rate