While evidence shows that the Global Financial Crisis (GFC) impacted firms (small to large), it is generally accepted (and shown by empirical studies) that the GFC predominantly impacted households/consumer spending (i.e., on aggregate demand). Assume this is the case. Also, assume that there is no fiscal policy response from the government.

Explain and illustrate the short-run effect of the GFC on macroeconomic equilibrium using the AD-AS model.