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Under the same scenario as in part ((1), in which economy you expect a bigger horizontal change in the aggregate demand curve? Adding a linear
Under the same scenario as in part ((1), in which economy you expect a bigger horizontal change in the aggregate demand curve? Adding a linear supply curve that is exactly the same for all three economies (in terms of slope and intercepts) to the picture, under the same scenario as in part ((1), in which economy you expect a bigger increase in the price level? How does the change in price level in any of these economies depend on the slope of the aggregate supply curve? (i.e., assume a steeper/less steep AS curve.) Explain and graphically show all the changes (including all the steps) in the AE, AD, and AS curves in a 45-degree diagram (for AE) linked with a demand and supply diagram, for an exogenous increase in the autonomous expenditures in economy C. (See Figure 23-8 on page 581 of the text-book only after you try to answer this part yourself for a comparison and if you nd it difcult.)
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