1. For the questions below, give an explanation of the short-run effect including the determinant of AD or AS that is causing the shift, the line that shifts (AD or AS), the direction of the shift (left or right), and the impact on output and price level (increase or decrease) and submit a properly drawn and labeled aggregate demand and aggregate supply graph for the scenario. Make sure your name and assignment number are written on each page of graphs you submit. All text must be written in the text box provided.

(1) Tourists flock to visit the major theme park's in Orlando, Florida.

(2) In an effort to provide tax relief for households while still balancing the budget, Congress votes to raise business taxes and decrease personal taxes.

(3) Assume that over the next ten years, the level of educational attainment in the US increases significantly.

(4) Congress votes to cut spending on the space program.

My answers for each problem are written below, please let me know if they are correct. I just need help in drawing the graphs. I drew them but I am not sure I am doing it correctly.

(1) The consumer confidence will shift the AD curve to the right because AD is increasing, thus a new equilibrium occurs at point E1 where both price level and output increase.

(2) When Congress raises business taxes, AS would decrease since the cost of producing goods is now higher, due to the higher taxes. However, AD would increase as personal wealth would increase due to lower personal taxes. AS would move left as AD would move right. The price level would increase as output decreases.

(3) The AS would increase as worker education would increase. The AS curve would shift right. The output would increase as the price level would decrease.

(4) The AS would increase as worker education would increase. The AS curve would shift right. The output would increase as the price level would decrease.