# 1. Assume the economy is in a recession with below average price level. If consumers think theeconomy will get worse and they decrease spending what will happen in the short and long run.2. If the economy is in an inflationary gap period with below average price level, what happens inthe short and long run if the government increases regulation on the energy sector.3. If the economy is in a period of stagflation, what happens if the government increases taxes inthe long run and short run? Macro Worksheet to be collected. Make a copy for yourself to go over in classAssume there are 2 states New York (NY) and Minnesota (MN). NY with a Marginal propensityto consume (MPC) of 90% and MN with a Marginal Propensity to save (MPS) of 30%. If bothstates have the same minimum level (or autonomous) consumption) of 2,5001.a) Demonstrate and explain the income expenditure model for Minnesota and New York onseparate graphs with disposable income ranging from 0 to \$10,000 in \$2,000 increments.b) Compare the minimum income levels where savings begins for NY and MN.c) How does the difference in MPC affect the economies for each state in the steady state?d) How is this relevant to the economic issue of today about wealth inequality, specifically, Iftwo individuals have 2 different MPC? Demonstrate and explain.Hint Formula from Module C a MPC* Yd where Yd is disposable income.Aggregate Demand and Aggregate SupplyMethod1) Starting Position will be given2) Shock Demand or Supply3) Positive or Negative Shift of Demand or Supply4) Ouput gapist recessionary or inflationary5) Demonstrate and explain effects of initial shock on GDP and Price level6) In the long run, without policy Demonstrate and explain the market response and why.what will happen to GDP and Price Level

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Hello, I sent those questions yesterday and just the first part was answered. I would like help on the questions left, the ones on the second file. 1, 2, and 3.

Thank you

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1. Given in the question that economy is in recession with below average price level and consumer thinks that economy will get worse and they decrease...

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