Suppose that there is a positive aggregate demand shock. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.
AD curve shifts right:
Hint
Box 1: Select the best answer
Question 2
Suppose that there is a negative aggregate demand shock. Which graph most accurately shows how this would affect aggregate demand - aggregate supply model. Note that the new curve is shown in gray.
AD curve shifts left:
Hint
Box 1: Select the best answer
Question 3
Suppose that we observe increased foreign demand. Which graph most accurately shows how this would affect aggregate demand - aggregate supply model. Note that the new curve is shown in gray.
AD curve shifts right:
Hint
Box 1: Select the best answer
Question 4
Suppose that we observe rise in interest rates. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.