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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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