Questions

1. Draw an ADAS graph at equilibrium. Suppose the interest rates on loans on capital goods decreased. Which curve will shift? Draw the new equilibrium.
2. Draw an ADAS graph at equilibrium. Suppose there is a decrease in government spending. Which curve will shift? Draw the new equilibrium.
3. Draw an ADAS graph at equilibrium. Suppose the income of our trading partners increases. Which curve will shift? Draw the new equilibrium.
4. Draw an ADAS graph at equilibrium. Suppose there is widespread concern that prices will continue to rise in the future. Which curve will shift? Draw the new equilibrium.