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c) Assume there is an increase in aggregate expenditure in Australia. List two factors that could cause the aggregate expenditure schedule to shift upwards. Explain

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c) Assume there is an increase in aggregate expenditure in Australia. List two factors that could cause the aggregate expenditure schedule to shift upwards. Explain the process whereby this would lead to a new equilibrium national income. Draw the aggregate expenditure (45 degree) diagram with national income on the horizontal axis to illustrate your answer and show the appropriate shift in aggregate expenditure. (7 marks) d) Some economist believe that short run wages are sticky and will not help an economy stabilize if there is a rise in the unemployment rate. Explain one reason for wages being sticky in a downward direction. (4 marks)

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