g Q.2 (D1. Equilibrium in the Aggregate demand-aggregate supply model) For each of the following separate scenarios, discuss what happens in short run and then long run. a. There is a severe drought reducing the farm yield. b. Consumers are more confident about the economy. c. There are more workers in the labor force. d. Due to stock market crash, the wealth of households drops e. The government depreciates its currency.

Match each definition in column 1 with a vocabulary word from column 2." some of the entries in column 2 do not apply costs which do not change with the level of output costs which change with the level of output the change in total costs resulting from an increase in output by one unit function showing the quantities of a particular good demanded at a range of price when the quantity supplied of a good is greater than the quantity demanded when the quantity demanded for a particular good is greater than the quantity supplied the price and quantity determined in a market when the supply equals the demand when revenue exceeds costs when costs exceeds revenue output where revenue = costs