Use the graphs and the other information provided to answer the questions. BEFORE answering the questions DRAW the appropriate shifts on the graphs and use the graphs to FIND the answers. 

1. Assume that there is an increase in government spending Which determinant? ____G___ D AD or D AS? AD   What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D GDP	2. Assume that there is an increase in taxes Which determinant? __TAXES_____ D AD or D AS? AD   What happens to: Price Level _______________ Real GDP _______________ Inflation __ (RATCHET EFFECT) Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]
3. Assume that there is reduced gov’t red tape Which determinant? _RED TAPE_____ D AD or D AS? AS   What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D potential GDP	4. Assume that there is an increase in business investment Which determinant? _____I_______ D AD or D AS? AD   What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP?] D GDP
5. Assume that there is an increase in oil prices due to war Which determinant? PRICE OF RESOURCES D AD or D AS? AS   What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]	6. Assume that the Fed decreases the money supply Which determinant? ___MS_________ D AD or D AS? AD   What happens to: Price Level __ (RATCHET EFFECT)__ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]
7. Assume that there is new technology that reduces electricity costs Which determinant? PRICE OF RESOURCES AD or D AS? AS   What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D potential GDP	8. Assume that exports increase Which determinant? _____Xn_______ D AD or D AS? AD What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D GDP
9. Assume that there is a decrease in marginal tax rates which increases labor productivity Which determinant? _PRODUCTIVITY__ D AD or D AS? AS What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D potential GDP	10. Assume that there is an poor harvests world wide which increases resource prices Which determinant? _PRICE OF RESOURCES___________ D AD or D AS? AS What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]
11. Assume that there is a rise in the foreign exchange value of the dollar Which determinant? ___Xn_________ D AD or D AS? AD What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]	12. Assume that there is an increase in labor training and education Which determinant? __PRODUCTIVITY___ D AD or D AS? AS What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D potential GDP
13. Assume that there is an increase in consumer debt Which determinant? ___C_________ D AD or D AS? AD   What happens to: Price Level _ (RATCHET EFFECT)_ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]	14. Assume that there is a decrease in consumer confidence Which determinant? ____C________ D AD or D AS? AD What happens to: Price Level _ (RATCHET EFFECT)_ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]
15. Assume that there is an recessions in Europe, Japan, and Canada Which determinant? ___Xn_________ D AD or D AS? AD   What happens to: Price Level _ (RATCHET EFFECT)_ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]	16. Assume that there are discoveries of new oil fields Which determinant? _PRICE OF RES_____ D AD or D AS? AS What happens to: Price Level _______________ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?] D potential GDP
17. Assume that there is an increase in interest rates not caused by price level changes Which determinant? __MS__________ D AD or D AS? AD What happens to: Price Level _ (RATCHET EFFECT)_ Real GDP _______________ Inflation _______________ Unemployment _______________ Economic Growth _______________ [D GDP or D potential GDP ?]	18. Assume that there is a decrease in the amount of money in circulation Which determinant? ____MS________ D AD or D AS? AD   What happens to: Price Level _ (RATCHET EFFECT)_ Real GDP _______________ Inflation _______________ Unemployment ___