ECON202 Chapter 13 - Problems 1. In the AS-AD model, show graphically what would happen to the US economy in the short-run and in the long-run if...

1. In the AS-AD model, show graphically what would happen to the US economy in the short-run and in the

long-run if aliens doubled the amount of capital in our economy. Label the initial long-run equilibrium with A,

the short-run equilibrium with B, and the new long-run equilibrium with C.

2. In the AS-AD model, show graphically what would happen to the US economy in the short-run and in the

long-run if income tax rates increase. Label the initial long-run equilibrium with A, the short-run equilibrium

with B, and the new long-run equilibrium with C.