6 veusne Portal List Time left 0:59:36 There are two UNRELATED parts: PART 1: (9 MARKS) Japan's economy can be represented by AS-AD diagram. The economy is currently operating at its long-run equilibrium. Suppose the government decreases spending on energy plants and national defence. Everything else remaining constant, what would be the short-run impact of the decrease in spending on the price level and inflation rate, real GDP (output), the unemployment rate, and interest rates. Your answer must reflect a deep understanding of the use of the AS-AD diagram to analyse a modern economy. (Hint! DO NOT DRAW THE DIAGRAM) (9 marks). PART II (6 MARKS) There are four types of unemployment: structural, frictional, cyclical and the natural rate of unemployment (NRU). For each of the following scenarios, state whether the unemployment is frictional, or, structural, or cyclical, or NRU. Explain why. Your answer must reflect the correct definition of each type of unemployment identified. home prt sc Y & 7 FF U 8 Fa . 8 F 69 F10 O List O P P