Question
Each of the following events caused a shift in the AD or AS curve in Canada. Identify which curve was affected and describe the effect
Each of the following events caused a shift in the AD or AS curve in Canada. Identify which curve was affected and describe the effect on equilibrium real GDP and the price level. Also explain the role, if any, of simple multiplier.
a. The government of Canada cuts income taxes.
b. The United States, our biggest trading partner, experiences a severe economic recession.
c. The prices of automotive parts, used by Canadian automobile producers, imported from China rise.
d. Canada sets new environmental standards that require power utilities to upgrade their production facilities.
e. Automotive firms in Canada switch to a new technology that raises productivity.
f. The Bank of Canada reduces interest rates.
g. Autoworkers agree to a lower wage rate.
and only typed answers needed
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