Q9 Answer: 6. As we all know that pandemic COVID-19 is creating the threat for the economic meltdown. You are required to analyze this pandemic effects on the aggregate demand and aggregate supply of Canadian economy. Answer 7. If consumers save a larger portion of their income, what effect would this have on the output, employment, and price level in the short run and long run? Answer: 8. The AD-AS model shows a snapshot of the economy at a given point in time. Both economic growth and inflation are dynamic phenomena. Suppose economic growth is 4% per year and aggregate demand is growing at the same rate. What does the AD AS model say the inflation rate should be? Answer 9. All commercial banks do not hold 100% of their deposits. Why? Should banks have to hold 100% of their deposits? Why or why not? Anwer 10. Laffer is one of the popular Economist who has pointed out that, in some cases, income tax revenue can go up when tax rates go down. Why might this be the case? Answer