1. The paradox of thrift is associated with the rationing of bank loans in the process of banks deposit creation.

True of False

A progressive income tax system automatically raises tax revenues during economic booms and reduces tax revenues during economic recessions.

True or False

In the immediate aftermath of a positive Aggregate Demand shock, both product prices and resource prices rise.

True or False

The Aggregate Expenditures model assumes fixed prices and the Aggregate Demand-Aggregate Supply model assumes flexible prices.

True or False

An increase in imports represents a positive Aggregate Supply shock.

True or False

2. How does the economic shock described below affect equilibrium output and product prices in the Aggregate Demand-Aggregate Supply model?

Short-run effect of an increased number of Canadians vacationing and shopping at home?

Short-run effect of large wage increases negotiated by militant labour unions?

Short-run effect of a sharp decline in business investment confidence from a global pandemic?

3. Identify the word, concept, or expression most closely related to the word, concept, or expression below:

Non-discretionary fiscal policy - ?

Negative Aggregate Supply Shock - ?