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Item Measure from one year ago (about) Most recent measure Increased or Decreased? AS or AD Shifts The direction in the AS or AD shifts

Item Measure from one year ago (about) Most recent measure Increased or Decreased? AS or AD Shifts The direction in the AS or AD shifts

Business Confidence

82 34 Deceased AD Left
Dow Jones Stock Market 35,627 30,353 Decreased AD Left
Energy/Gas prices 4.155 3.769 Decreased AD Left
House values 273.19 301.93 Increased AD Right
Federal Funds Interest Rate 0.08 2.56 Increased AS Right
Consumer Confidence 80 102.3 Increased AD Right

1. Using the chart above, draw the AS-AD diagram that shows the effect of those changes over the year. Start with the SRAS and the AD and the LRAS all on the same graph. A big change might mean a big shift. An important part of the economy might mean a big shift etc...

2. Finally, using the model, make a prediction about what happened to GDP and CPI

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