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For this question, use our AD/AS model. The economy is currently at long-run equilibrium. Suppose that...

For this question, use our AD/AS model. The economy is currently at long-run equilibrium. Suppose that US consumers stop buying imports from countries that have low minimum wages and sub-standard working conditions. Rather than buying imported goods, consumers seek out "made in the USA" products.

3. If the Fed wanted to respond to the shock to stabilize inflation and unemployment, how would they change the federal funds rate target and the money supply in response?

4. How is the long-run equilibrium (output, inflation, and unemployment) in (2) different from (3)?

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