After you have studied Economics in the News on pp. 286–287, answer the following questions.

a. If the second quarter 2017 change in inventories was a planned change, what role did it play in shifting the AE curve and changing equilibrium expenditure? Use a two-part figure (similar to Fig. 2 on p. 287) to answer this question.

b. The Statistics Canada report says that an increase in consumption expenditure was the main reason why real GDP increased. How do we know that most of the increase in consumption expenditure was induced?

c. Using the assumptions made in Fig. 2 on p. 287, what is the slope of the AE curve and what is the value of the autonomous expenditure multiplier?