Economic growth & aggregate demand and aggregate supply. An increase in labor productivity is caused by an increase in capital. In a closed economy (autarchy/no trade) where nx = 0. Y = c + i + g and. National savings (s) = s private + s public = (y + tr - t) + (t - tr -g) = y - c - g. A shift in this graph right indicates that something, for example a new technology increases profitability of investment (i) If it is = 0, then the budget is balanced. If it is > 0, then the budget is in a surplus. If it is < 0, then the budget is in a deficit. The graph shows a big increase in government spending with no corresponding taxes (t) This causes a leftward shift in the. Equilibrium interest rate (i) increases and money ($) decreases; theoretically investments also decrease. I r l i l i ez e.