This raises the interest rate. On a third diagram, show how the changes in the market for loanable funds re-establish equilibrium in the market for money. An increase in the money supply. AD increases since the money supply increases. A decrease in the money supply.
AD falls since the money supply decreases.
A tax on credit card purchases. AD stays the same. As per the notes, if spending and the money supply stay the same, this just means that the government borrows less. AD stays the same. As per the notes, if taxation and the money supply stay the same, this just means that the government borrows less.