In the 1970s, the United States had a situation of stagnation (little economic growth) and inflation. The likely cause of this situation were the oil shocks of the 1970s. In 2020 we are living through a different type of supply shocks were supply bottlenecks have disrupted production around the world. Assume, however, that by May 2021 we have gone back to a full-employment situation (short-run and long-run equilibrium). However, inflation is around 8% per year.

A- As a solution to this problem, the United States agrees to allow 10 million immigrants to come to the United States. Use the AS/AD model to determine if this would work or not.
B- Assume that the FED decides to sell bonds to the public since it's not convinced that the policy described in A would work. How would this impact the US economy? Explain your answer using the AS/AD model.