The government restrictions and long procedures will discourage firms from entering the market. — New investors scared thus macroeconomic output decrease result aggregate supply

The government restrictions and long procedures will discourage firms from entering the market. New investors will be scared thus the macroeconomic output will decrease. AS a result, aggregate supply curve will shift to the left.

Existing firms will decrease their output to avoid exceeding the electricity consumption limit. Production will be reduced. Due to reduced production, less worker will be required to produce the output. Unemployment will increase as less workers will be required. The GDP will drop. Reduced supply will lead to price increases. High prices will imply more money is required to buy few goods. Due to high prices, the value of money will decrease causing inflation to increase.

AS2

PL LRAS

AS1