1. Utilizing the AD/AS model, elucidate how a sudden decrease in oil prices could lead to deflation in the economy.

a. In your response, delineate a factor external to the pandemic that impacts both (i) aggregate demand and (ii) aggregate supply, culminating in deflation. Additionally, elucidate how these dual forces interact to precipitate deflation.

2. Explain, and drawing upon the concepts covered in this course, elaborate on three distinct monetary policy initiatives that the federal government could undertake and their potential impacts.

This response is valued at 15 marks.

You must provide three separate paragraphs, each dedicated to explaining a different fiscal policy initiative.

3. Drawing upon the components outlined in the expenditure approach to GDP as expounded in this course:

(i) Investigate the potential impacts of changes in consumer confidence on each component of the expenditure approach.

(ii) Utilize pertinent terminology and theoretical constructs from the course material to substantiate your analysis.

Given the ten-mark valuation of this question, ensure your response provides a comprehensive exploration of the potential effects on each component and the rationale behind these impacts.

4. Compare and Contrast the utilization of money with the practice of barter in the exchange of goods and services. 5. Imagine you are the Head of the Bank of Canada, and the economy is experiencing a 2 percent inflation rate. Unemployment is above the full-employment level, and the current target interest rate stands at 1 percent. What alteration to the target interest rate would you advocate for?

Elaborate on the procedure for executing this adjustment.

Evaluate the potential effects of these implementation measures on the lending capacity of the banking system, the real interest rate, investment spending, aggregate demand, and inflationary pressures.

6. What phase of the business cycle is the Canadian and Ontario provincial economy experiencing at the present time? Justify your answer.

7. Analyze the significance of the GDP deflator in measuring economic performance and inflationary trends.

This response is worth 5 marks.

Ensure your analysis covers:

a. The conceptual framework of the GDP deflator

b. The advantages and limitations of using the GDP deflator compared to other inflation measures.

c. Examples of real-world applications and implications of GDP deflator analysis in economic policymaking or business decision-making

8. An economy's real GDP is $100,000 in year 1 and $110,000 in year 2. What is the growth rate of its GDP?

Assume that population was 10,000 in year 1 and 10,500 in year 2.

What is the growth rate in real GDP per capita?

You must show all work in order for the answer.