Y7

5. Assuming the economy is currently in a recession, use a separate set of AS-AD diagrams for each of the following scenarios. Be sure to include the LRAS and the proper initial equilibrium showing that the economy is a recession. And then, explain what is likely to happen to the output (Y), unemployment, price level, and inflation in the short run, making sure to explain the shifts in any curve: a. U.S. households decide to increase their retirement savings, more than doubling the total savings per year. b. Administration announces that it will significantly increase the number of drilling permits given to the oil companies. C. Because the new variants of Covid seems to cause only mild symptoms for most people, the consumer and business confidence surges