1.Suppose that aggregate demand increases by $1 billion, what would happen to equilibrium RGDP? Explain.

2.When the price level is falling, we experience deflation. This occurred in Japan not to long ago. What do you believe causes deflation? How might individuals and businesses react to deflation in a way that worsens it?

3.What would changing the rules to Employment Insurance payments so that it was more difficult to collect, do to potential GDP?

4.What can governments in Canada do to encourage economic growth?