Consider the Canadian economy. The economy has been experiencing a recessionary gap since the pandemic caused unemployment

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Consider the Canadian economy. The economy has been experiencing a recessionary gap since the pandemic caused unemployment and pessimism.

1) How would a decrease in government spending affect Aggregate demand (AD)? Would it cause an increase in demand or a decrease? Why?

2) What reducing government spending the good idea at this time? Why?

On a piece of paper. Draw the rest of recessionary gap the economy is facing using the AD-AS model.

Label the axes and curves

Show the level of potential a real GDP (Y*)

Show the shift in AD that you described.

Take a photo or scan your drawing and upload.

Posted Date: Jul 03, 2024 05:14 PM

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Consider the Canadian economy. The economy has been experiencing a recessionary gap since the pandemic caused unemployment

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