Use AD-AS model to analyze how the following shocks will affect economic activity in the short and long run; for each shock: a) Illustrate changes that will occur using AD-AS graph, in short-run and explain why each curve shifts. b) Determine how the prices and the output will be affected in the short-run. c) On the same diagram, illustrate how the economy can adjust in the long-run (moving to the potential level of output) by a shift in the SRAS curve. d) Determine how the prices and output will be affected in the long-run. The shocks are: 1. Consumers become optimistic about their future earnings and start consuming more. 2. A country the U.S. trades with (consider a major export of goods and services to that country) experiences a recession