6.Suppose a war causes a sudden, large increase in government spending. a) What happens to both prices and GDP in the short-run Classical Model? Do

6.Suppose a war causes a sudden, large increase in government spending.

a) What happens to both prices and GDP in the short-run Classical Model? Do they increase decrease or stay the same? Explain.

(b) What happens to both prices and GDP in the short-run Keynesian model? Do they increase decrease or stay the same? Explain.

PL AS P2 P1AD2AD1 GDP(Y) Y1PLASP2 P1AD2AD1Y1 Y2 GDP(Y)