Problem
Assume that the US macroeconomic equilibrium is equal to the potential GDP.
Americans are becoming more cautious with their household spending due to the uncertainty of the presidency of Donald Trump. Using AD-AS model, explain carefully the immediate and long term effects of the event towards the economy. Draw the appropriate AD-AS diagram to support your explanation.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.