Economists use the model of aggregate supply and aggregate demand (AS-AD model) to explain short run fluctuations of GDP around its long run trend.
i) In the context of the AS-AD model, explain which curve(s) the following events would shift, which way, and why:
a. The government increases income tax in their budget
b. An improvement in existing technology
c. There is a change in expectations and firms expect the price level to be higher in the future
d. Consumers sentiment changes and they feel more pessimistic about the economy
e. The central bank engages in open market operations and buys bonds from the public.
