For each event draw an ADAS diagram showing the proper shift from the list below and indicate the new equilibrium. Review Figure 8.7; 8.8 and 8.9 to see how your graphs should look. The curves need to be labeled but there are no numbers on the x or y axis. There are 4 possible shifts:

AD right: increase in aggregate demand

AD left: decrease in aggregate demand

AS right: increase in aggregate supply

AS left: decrease in aggregate supply

1. The Trump administration removes environmental protection rules and regulations that limited certain types of energy production.
2. The cost of production rises due to tariffs on intermediate goods from China.
3. The government cuts personal income taxes, issuing thousands of additional tax refunds.
4. There is a reduction in demand for American products and vacations in America by foreign tourists.
5. The government passes new legislation raising the minimum wage by $3.00 per hour.
6. Households are worried about the future of the economy and they begin to save more of their income instead of spending it on current consumption.
7. Large increases in the stock market cause significant growth in retirement accounts and investment portfolios.
8. The Federal Government cuts the Food Stamp program that provides assistance purchasing food to millions of low income and elderly households.

LRAS LRAS SRAS SRAS Price Level Price Level P. E P P. En P AD AD AD AD. Y1 Y Yo Real GDP Real GDPLRA LRAS LRASZ LRAS AD AD En Price Level E1 Price Level SRAS, SRAS SRAS, SRAS, SRAS. YY Real GDP Real GDP (a) Productivity growth shifts AS to the right (b) Higher prices for key inputs shifts AS to the leftLRAS SRAS P 1 Price Level AD AD, YO Y Real GDP