As you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD. Any event that causes a change in production costs or increases productivity will shift aggregate supply (AS). Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give the direction in which the graph shifts.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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As you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate
demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in
consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD.
Any event that causes a change in production costs or increases productivity will shift aggregate
supply (AS).
Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give
the direction in which the graph shifts.
Demand
Situation
Aggregate
Supply
Aggregate
Demand
Supply
Sales of Atlanta Braves gear grows
with the success of the team.
1.
The President and Congress pass a
trillion dollar stimulus bill to
provide aid during recession.
2.
3.
Salmonella outbreak in peanut
processing plants threatens
lunches for school children.
4.
Pomegranates are shown to be
cancer fighting superfoods.
Value of U.S. dollars declines,
exports increase.
5.
Global oil prices tank as shale
fracking surges.
6.
7.
Housing market crashes. Federal
Reserve slashes interest rates.
House votes to block EPA
regulations on coal fired electricity
plants.
9. Choose one of the Situations that changes SRAS or AD. Draw the shift in SRAS or AD and explain what
happens to inflation, unemployment, and real GDP.
Transcribed Image Text:As you know, supply and demand shifts are caused by one of their determinants. Shifts in aggregate demand (AD) show the effect of events on price level and Real GDP. Any event that causes a change in consumer, business, or government spending or any change in net exports (C+l+G+Xn) will shift AD. Any event that causes a change in production costs or increases productivity will shift aggregate supply (AS). Decide if the following events are Micro, shifting supply or demand, or Macro, shifting AD or AS. Give the direction in which the graph shifts. Demand Situation Aggregate Supply Aggregate Demand Supply Sales of Atlanta Braves gear grows with the success of the team. 1. The President and Congress pass a trillion dollar stimulus bill to provide aid during recession. 2. 3. Salmonella outbreak in peanut processing plants threatens lunches for school children. 4. Pomegranates are shown to be cancer fighting superfoods. Value of U.S. dollars declines, exports increase. 5. Global oil prices tank as shale fracking surges. 6. 7. Housing market crashes. Federal Reserve slashes interest rates. House votes to block EPA regulations on coal fired electricity plants. 9. Choose one of the Situations that changes SRAS or AD. Draw the shift in SRAS or AD and explain what happens to inflation, unemployment, and real GDP.
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