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Question 1
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.




 
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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.




 
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Question 3
Suppose that we observe increase in wealth. Which graph most accurately shows how this would affect aggregate demand - aggregate supply model. Note that the new curve is shown in gray.





 
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Question 4
Suppose that we observe reduction in government spending. Which graph most accurately shows how this would affect the aggregate demand - aggregate supply model? Note that the new curve is shown in gray.





 
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