Shifting the Aggregate Demand & Aggregate Supply Curve

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Businesses Owners are less optimistic about the health of the economy.

Left (-) Shift in AD

Decrease in Assets (Wealth)

Left (-) Shift in AD

Decrease in Government Spending

Left (-) Shift in AD

Increase in Taxes

Left (-) Shift in AD

Monetary Policy (Decrease in Quantity of Money)

Left (-) Shift in AD

Pessimistic Expectations

Left (-) Shift in AD

Stock of Capital is Large

Left (-) Shift in AD

The Federal Reserve increases interest rates.

Left (-) Shift in AD

The Government decreases welfare and veterans benefits.

Left (-) Shift in AD

Cost-Push Inflation

Left (-) Shift in AS

Expectation of Higher Inflation

Left (-) Shift in AS

Increase in Commodity Prices

Left (-) Shift in AS

Increase in Nominal Wages

Left (-) Shift in AS

Workers Decrease in Productivity

Left (-) Shift in AS

A rising price level decreases the value of money help for purchases.

Movement Right (+) along the AD curve

A new president makes consumers and businesses more confident about the economy.

Right (+) Shift in AD

Congress passes a tax cut for the middle class, and the President signs it.

Right (+) Shift in AD

Consumers expect the job market to be much stronger in the next few months.

Right (+) Shift in AD

Decrease in Taxes

Right (+) Shift in AD

Demand-Pull Inflation

Right (+) Shift in AD

During a recession, the government increases spending on schools, highways, and other public works.

Right (+) Shift in AD

Increase in Assets (Wealth)

Right (+) Shift in AD

Increase in Government Spending

Right (+) Shift in AD

Monetary Policy (Increase in Quantity of Money)

Right (+) Shift in AD

Optimistic Expectations

Right (+) Shift in AD

Stock of Capital is Small

Right (+) Shift in AD

The Government lowers personal income taxes.

Right (+) Shift in AD

The stock market has reached new records high levels of value.

Right (+) Shift in AD

The stock of physical capital has been falling for nearly a year.

Right (+) Shift in AD

When the unemployment rate at 5 percent, the federal government reduces personal taxes and increases government spending.

Right (+) Shift in AD

Decrease in Commodity Prices

Right (+) Shift in AS

Decrease in Nominal Wages

Right (+) Shift in AS

Expectation of Lower Inflation

Right (+) Shift in AS

New oil discoveries cause large decreases in energy prices

Right (+) Shift in AS

New technology and better education increase productivity.

Right (+) Shift in AS

Workers Increase in Productivity

Right (+) Shift in AS


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