Suppose that the ecnomy is in a long-run equilibrium.
a- Draw a diagram to illustrate the state of the economy. Be sure to show aggregate demand, short-run aggregate supply, and long-un aggregate supply.
b-Now suppose taht a stock-market crash causes aggregate demand to fall. Use your diagram to show waht happens to output and the price level in the shot run Waht happens to the unemployment rate?
c- use the sticky-wage theory of aggregate supply to explain what will happen to output and the price level play in this adjustment? be sure to illustrate your analysis in a graph