Draw the impact on the AS/AD model for each scenario below. Determine the impact on Real GDP, price level, unemployment, and the business cycle. First fill the table and then explain each scenario in few lines.

Use the following terminologies:

1) Real GDP: Increaseordecrease

2) Price Level: Increaseordecrease

3) Unemployment: Increaseordecrease

4) Business Cycle: ExpansionorContraction

Use the following lines to show shifting in AD or AS, just drag it to right place and then compare the new equilibrium with the previous one.

TABLE: Just insert the arrows and lines to fill this table.

Scenario Graph It! Real

GDP Price

Level Unemployment Business Cycle

Ministry of Finance passes a tax cut for the middle class and the P.M Imran Khan signs it.

Imports into the Pakistan begin to decline while exports out of the Pakistan rise.

Productions costs rise significantly in many sectors of the economy.

FBR raises taxes on corporations.

People feel confident (Tabdeli) about the future of the economy (Consumer confidence).

"Explanations"

Scenarios Explanations

Ministry of Finance passes a tax cut for the middle class and the P.M Imran Khan signs it.

Imports into the Pakistan begin to decline while exports out of the Pakistan rise.

Productions costs rise significantly in many sectors of the economy.

FBR raises taxes on corporations.

People feel confident (Tabdeli) about the future of the economy (Consumer confidence).