Q 4: Activity 4 - National Income Article (Fluctuations in output and the price level)

This assignment is a good way for students to connect economic theory to actual events.

Steps to this activity:

1. Find an article in a recent newspaper or magazine illustrating a change that will affect national income. (5 marks)

2. Analyze the situation using economic reasoning. (10 marks)

3. Draw an aggregate demand and aggregate supply graph to explain this change. Be sure to label your graph and clearly indicate which curve shifts. Explain what happens to national income and to the price level in the short run. (10 marks)

4. Turn in a copy of the article along with your explanation. (5 marks)