Short run and Long run Aggregate Demand.
a) Assume an initial macroeconomic equilibrium. Elucidate both the SR and LR impact of an expansionary AD shock. Use appropriate diagrams and provide a brief real world ex of this type of shock.
b) Create another diagram; once again start from an initial macroeconomic equilibrium. describe both the SR and LR impact of a contractionary AS shock on Y. Use the appropriate diagrams and provide a brief real world ex of this type of shock.