Please give a short answer to each question. 1. Name two macroeconomic variables that decline when the economy goes into a recession. Name one macroeconomic variable that rises during a recession.2. List and explain the three reasons the aggregate-demand curve slopes downward. 3. Explain why the long-run aggregate-supply curve is vertical. List and explain the three theories for why the short-run aggregate-supply curve slopes upward. 4. What might shift the aggregate-demand curve to the left? 5. What might shift the aggregate-supply curve to the left? 6. What is the theory of liquidity preference? How does it help explain the downward slope of the aggregate-demand curve? 7. Use the theory of liquidity preference to explain how a decrease in the money supply affects the aggregate-demand curve. 8. The government spends $3 billion to buy police cars. Explain why aggregate demand might increase by more or less than $3 billion. 9. Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it wants to stabilize aggregate demand? If the Fed does nothing, what might Congress do to stabilize aggregate demand? Explain your reasoning. 10. Give an example of a government policy that acts as an automatic stabilizer. Explain why the policy has this effect.