I need to know which way aggregate demand (AD) shifts according to scenarios and why:
1) Economic booms in both Japan and Europe result in massive increases in orders for exported goods from the United States.
2) As part of its countercylical policy, the government both reduces taxes and increases transfer payments.
3) While the U.S. was in the midst of the Great Depression, a foreign power attacked, Congress declared war and more than 1,000,000 soliders were drafted in the first year while defnese spending was increased several times over.
4) The balance the budget, the federal government cuts Social Security payments by 10% and federal aid to education by 20%.
Supply issues (SRAS- which way does it shift and why)
1) New environmental standards raise the average cost of autos and trucks 5%.
2) Fine weather results in the highest corn and wheat yields in 40 years.
3) Because of decreased international tension, the government sells off thousands of army-surplus Jeeps and trucks at prices that are far less than the market price for their commerical counterparts.
4) An enemy power sets up a blockade of the sea lanes leading to a country, and most ships refuse to deliver cargo through blockade.
Thank you :)