According to the graphs, a decrease in the aggregate price level would cause a shift from: Planned aggregate spending D B 45-degree line AE AE Y₁ Yz Real GDP Aggregate price level F 9- P2 a. A to B b. B to C OCC to B d. A to C G Y₁ Y₂ AD Real GDP

Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price level.

Briefly explain the reason for the near-horizontal shape of the SRAS curve on its far left.

Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?