Download Shifts in Aggregate Demand and Supply File

Shifts in Aggregate Demand
For each situation, determine whether the event will increase or decrease AD,
or cause no change. Write +, -, or NC, along with the determinant causing the
shift.
1. The US Congress cuts personal income taxes.
2. A newspaper survey shows business spending on capital goods has
been decreasing.
3. Government spending on health insurance for low-income people
increases, but there is no increase in taxes.
4. A poll shows consumers have become more confident about the
economy.
5. The stock market falls sharply, and investors lose billions of dollars.
6. A survey of business leaders shows they believe the economy is headed
for recession.
7. Worker productivity rises for the fourth straight year.
8. The president cuts defense spending by 20% with no increase in
domestic spending.
Shifts in Aggregate Supply
For each situation, determine whether the event will increase or decrease AS,
or cause no change. Write +, -, or NC, along with the determinant causing the
shift.
1. Wage rates increase because of union pressure on businesses.
2. OPEC successfully increases oil prices.
3. Labor productivity increases dramatically.
4. Discovery of huge natural gas deposits decreases energy prices.
5. Widespread adoption of computer technology brings new efficiency to
industry.
6. Government spending on a new missile defense system increases.
7. The government cuts income tax rates, increasing the incentive for
consumers to spend and save.
8. A low birth rate and limits on immigration decrease the labor force.
9. Research shows improved schools have increased the skills of
American workers and managers.