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Inflation Rate (percent) Graph A LRAS1 AS1 Let the economy initially be in long-run equilibrium at point 1 in the figure to the right

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Inflation Rate (percent) Graph A LRAS1 AS1 Let the economy initially be in long-run equilibrium at point 1 in the figure to the right. Now suppose that in an effort to reduce the current federal government budget deficit, the White House decides to sharply decrease government spending. On Graph A 1) Using the line drawing tool, shift a single curve in the accompanying figure to illustrate the short-run effect of the sharp spending cut. Properly label your curve. 2) Using the point drawing tool, identify the short-run equilibrium. Label this point '2 Carefully follow the instructions above, and only draw the required objects. ADD A LABEL AD1 Aggregate Output, Y (5 trillions)