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The Phillips Curve 1. Draw the short-run and long-run Phillips curve. Label three points representing a recessionary gap, an inationary gap, and full employment output. Identify what happens to the short-run Phillips curve when there is a change in aggregate demand and when there is a change in aggregate supply Economic Growth 2. Dene capital stock. Use the aggregate demand and supply to show the effects of a decrease in interest rates in the short-run and in the long-run. Explain why each curve shifts. Also explain why an increase in consumer spending would not have the same effect in the long-run. 3. Identify three (3) public policies that could lead to more economic growth and explain why growth would occur