Suppose the economy begins at full employment. Label this st…

Suppоse the ecоnоmy begins аt full employment. Lаbel this stаrting point as point "1." Then, suppose that, due to increased instability in the financial markets, a decrease in investor and consumer confidence occurs. Show the effects on your graph and label the new equilibrium point "2." Based on the above  AD will [answer1] SRAS will [answer2] LRAS will [answer3] the price level (P) will [answer4] as we move from point 1 to point 2 the level of production (Q) will [answer5] as we move from point 1 to point 2. Lastly, suppose the Federal Reserve wants the economy to return to full-employment as quickly as possible. Should the Fed intervene? If so, show the impact of successful monetary policy on your graph. Label this new equilibrium point "3." In this case, AD will [answer6] SRAS will [answer7] LRAS will [answer8] the price level (P) will [answer9] as we move from point 2 to point 3 the level of production (Q) will [answer10] as we move from point 2 to point 3.