Answer the following questions: 1. Assume the Bank of Canada decreases the supply of money. In the short-run, explain how the interest rate and Real GDP in the economy will be affected. 2. Suppose the economy suddenly experiences a lower level of unemployment and a higher price level in the short-run. What could be responsible for this: An increase in Net Taxes OR an increase in wages OR an increase in transfer payments? Choose one and explain why. 3. Suppose the government implements a policy that increases taxes on business investments and decreases consumption tax at the same time. Use a National savings and Investment demand analysis to briefly explain the effect of this policy on the real interest rate and Investment in the economy? AY B T. Ff KE