Step-by-step explanation:
I am unable to directly draw diagrams. However, I can describe the changes you would see in the diagrams and explain the impacts.
(a) In the initial long-run equilibrium, the aggregate-demand/aggregate-supply diagram would show the aggregate-demand (AD) curve intersecting the long-run aggregate-supply (LRAS) curve at the potential GDP level, indicating price stability and full employment. The Phillips curve would show a natural rate of unemployment with a corresponding inflation rate.
(b) With the decrease in overseas workers due to border closures, there would be a decrease in the aggregate supply (AS) curve. This is because the reduction in labor supply leads to decreased production capacity and potential GDP. In the aggregate-demand/aggregate-supply diagram, the AS curve would shift to the left, causing a higher price level and lower output. This represents a contractionary supply shock.
(c) In the short run, the decrease in overseas workers and the shift in the AS curve would lead to a temporary increase in inflation and higher unemployment. With the reduced labor supply, firms may face higher wage costs, and they may pass on some of these costs to consumers in the form of higher prices, causing inflation. Additionally, the decrease in output due to the contractionary supply shock may lead to an increase in unemployment as firms reduce their workforce or cut back on hiring.
It's important to note that these effects are temporary and represent short-run adjustments. Over time, the economy may adapt, and the AS curve may shift back to the right as alternative solutions are found for labor shortages. The long-run impact on inflation and unemployment will depend on various factors, such as the duration of border closures and the ability of the economy to adjust to the new circumstances.