Using a separate set of AS-AD diagrams for each of the following scenarios, 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 save more and more than doubles the total savings per year. b. With the news of rapid vaccinations, the consumer and business confidence surges. c. Natural gas is now the most important source of power in the U.S. And, since the advent of fracking, it is also the cheapest. New administration imposes a ban on fracking which increases the prices of not only natural gas, but all carbon fuels. d. The U.S. is currently described as mostly recovered from the pandemic induced recession. Congress and the White House enacts a $2 Trillion “infrastructure” spending.
Using a separate set of AS-AD diagrams for each of the following scenarios, explain what is likely to happen to the output (Y),
a. U.S. households decide to save more and more than doubles the total savings per year.
b. With the news of rapid vaccinations, the consumer and business confidence surges.
c. Natural gas is now the most important source of power in the U.S. And, since the advent of fracking, it is also the cheapest. New administration imposes a ban on fracking which increases the prices of not only natural gas, but all carbon fuels.
d. The U.S. is currently described as mostly recovered from the pandemic induced recession. Congress and the White House enacts a $2 Trillion “infrastructure” spending.
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