Question

Explain the three reasons why the aggregate-demand curve slopes downward.. Give an example of an event that would shift the aggregate-demand cure. Which way would this event shirt the curve? 2. Suppose that the election of a popular prime minister suddenly increases les confidence in the future. Use the model of aggregate demand and aggregate supply to analyze the effect on the economy Name two macroeconomic variables that decline when the economy goes into a recession. Name one macroeconomic variable that rises during a recession Explain whether each of the following events will increase, decrease, or have no effect on long run aggregate supply. a. Canada experiences a wave of immigration c Intel invents a new and more powerful computer chip. d. A severe hurricane damages factories along the east coast. 5. Expain whether each of the following events shifts the short-un aggregate-suwy curve, the aggregate demand curve, both, or neither. For each event that does shit a curve, use a diagram to Mustrate the effect on the economy. a. Households decide to save a larger share of their income. Increased job opportunities overseas cause many people to leave Canada

question 1,2,3 and 4

Answer 1

0 Aggregate demand wwe slopes dounway ble a) Income effect & As price deneases, real income increases & Demand increass .6) substitution effect. As price increases, relative price menicases due to which demand decreases or vice versa. As price decreases there will be more number of consumers 4 this increases demand. An increase in income will shift the demand curve to the right An increase in price of substitute good shift the demand cewe to the right A duvease in puce of complementary good will shift the demand crowe to the.