Download AS and AD Practice

Answer Key
Sample of what students should draw
The Change
AD/AS Model
The Result
PL
1.
Before:
A Label Point at
LRAS
AS
original equilibrium
B
1. Calvin, and other children,
2. Shifter Identify Shifter
convince their parents to purchase
3. After: B Label Point
more “big ticket” items for the
A
AD1 After Shift
Holidays.
4. Gap: Identify if the shift
AD
results in an inflationary or
GDPR
recessionary gap based on
the new output.
AD/AS Practice Sheet Answers
Shifter
Gap Caused
Consumer Spending
Inflationary
Actions of Gov
Recessionary
Question
1.
2.
AD or AS
AD Increase
AS Decrease
3.
AD Increase
Net Exports
Inflationary
4.
5.
6.
7.
8.
9.
AD Decrease
AS Increase
AD Increase
AS Increase
AD Decrease
AD Increase
Gov Spending
Resource Prices
Consumer Spending
Productivity
Net Exports
Investment
Recessionary
Inflationary
Inflationary
Inflationary
Recessionary
Inflationary
10.
11.
12.
AD Decrease
AD Increase
AS Increase
Consumer Spending
Gov Spending
Resource Prices
Recessionary
Inflationary
Inflationary
Notes
Refers to cartoon below
Key word “effects on
production”
Increases demand for US
exports
G is a shifter of AD
Oil is a key resource
Increases disposable income
Key word “productivity”
Less demand for US exports
Key word “effect on
investment”
(This would also effect AS
and LRAS when firms buy
more capital)
C is a shifter of AD
G is a shifter of AD
Wages are cost of
production