Topic: Macroeconomics AD-AS Model What Is the Effect on AD?) Determine the effect on the short-run aggregate demand (AD) curve for each of the following scenarios and GRAPHICALLY ILLUSTRATE ALL 5 SCENARIOS. Please make sure that graphs are legible. Example Graph below: Sample Answer: The AD curve will shift to the right. N ._bi 2 A e ol (53R 1. A decrease in consumer wealth is due to a plunge in stock prices. 2. Households and businesses have more optimistic expectations regarding future economic performance. 3. There are higher levels of investment spending by businesses. 4. The government cuts taxes for households and businesses. 5. The Fed decreases the money supply