Q. Assume which the economy is in a long-run equilibrium.
a- Draw a diagram to illustrate the state of the economy .Be sure to explain how aggregate demand, short-run aggregate supply, and long-un aggregate supply.
b-Now Assume which a stock-market crash causes aggregate demand to fall. Use your diagram to explain how Illustrate what happens to output and the cost level in the short run. Illustrate what happens to the unemployment rate?
c- Use the sticky-wage theory of aggregate supply to Explicate Illustrate what will happen to output and the cost level play in this adjustment? Be sure to illustrate your analysis in a graph.