5. For each of the following, draw an Aggregate Demand- Aggregate Supply diagram with left hand axis inflation and bottom axis output to show the short-run and long-run effects on output and inflation. Assume the economy starts in long-run equilibrium and explain the consequences of any shifts: (i) An increase in consumer confidence that leads to higher consumption spending (ii) An easing of monetary policy by the Central Bank (a change in inflation target which causes a shift to the right in their Monetary Policy Reaction Function). (iii) War in Ukraine which causes a rise in government purchases. (iv) A sharp fall in oil prices post war in Ukraine.

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