Tax south and north

Problems



Problem 1

List three things that would cause a RIGHTWARD SHIFT in the Aggregate Demand curve. List three things that would cause a RIGHTWARD SHIFT in the Aggregate Supply curve.







Problem 2

There has been extensive discussion of the "wealth effect." The argument goes that inflated stock values were partially responsible for the strong U.S. economy of the 1990's. Explain this linkage in words and then illustrate with an Aggregate Demand/Aggregate Supply diagram