Question: Evaluate the effect of the following on the AD curve, AS curve, equilibrium price level and equilibrium output in the U.S.
(a) The U.S. imposes tariffs on foreign goods to promote domestic industry. In retaliation, foreign countries impose tariffs on U.S. goods.
(b) Congress decides to decrease personal income taxes, and to compensate for the lost revenue they decrease business subsidies.
(c) A technology boom improves technology across industries, improving their productivity.
(d) U.S. oil companies discover new large oil reserves in the U.S. The international price of oil falls.
(e) Consumers expect a recession
Supply Demand Quantity Price
(use left, right, or NC for No Change for supply and demand) (use up , down, or indeterminate for quantity and price)
example: right NC up down
a.
b.
c.
d.
e.