1. If people expect interest rates to keep going up, it will likely make them spend less money overall. This means there's less demand for goods and services in the economy, which we call aggregate demand (AD). The textbook factor causing this change is the interest rate effect. When people spend less, it affects businesses, and they might produce fewer things. This shift in demand means we're not producing as much as we could be. So, instead of being at our best, we end up below our full potential. In this situation, prices would probably drop because there's not as much demand for goods. Also, businesses might not need as many workers since they're not making as many things. So, jobs might become harder to find. Overall, when people expect interest rates to rise, it can slow down the economy, meaning less production, lower prices, and possibly fewer jobs for people. 2. When workers choose not to go back to physical workspaces, it affects how much stuff the economy can make. This is because there are fewer people available to work, which is a part of what we call aggregate supply (AS). In the textbook, we learn that when there's