2.Use aggregate supply and demand diagrams to predict the change in GDP and the price level when the following occur:

a)New varieties of high-yielding grains are developed.

b)A round of collective bargaining in the industrial sector leads to relatively high

wage increases.

c)Pessimistic business forecasts lead firms to reduce their planned investment.

d)An announcement of major increases in social security retirement benefits leads

people to reduce their personal saving.

e)The population grows, increasing both the labor force and the demand for goods

and services.