Q1 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 show the impact and then explain each scenario in a few lines.

Use the following terminologies:

1) Real GDP: Increase or decrease

2) Price Level: Increase or decrease

3) Unemployment: Increase or decrease

4) Business Cycle: Expansion or Contraction

Use these lines \\\\ //// to show shifting in AD or AS and then compare the new equilibrium with the previous one.

Insert the arrows and lines to show shifts in AD or AS and then give the explanations for each.

1. Scenario:

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

Graph: