The federal government increases spending on national defense.

On the following graph, indicate the short-run and long-run effects of this change on the economy, assuming policymakers take no further action.

Aggregate DemandAggregate SupplyLRASPrice LevelQuantity of OutputAggregate DemandAggregate SupplyLRAS

In the short run, the price level and output .

In the long run, the price level will be and output will be compared to the initial equilibrium prior to the change.