QUESTION 1 Use the graphs below to answer the following questions: n (billions of dollars) B. Saving (billions of dollars) 0 Disposable income billions of dollars) Consumption Disposable income (billions of dollars) (A) (B) a. If in graph A line A2 shifts to A3 because households consume more and this change is not due to changing taxes, then what would happen to line B2 in graph B? (2 points) b. If in graph B, line B2 shifts to B1 because households save less, then what will happen to line A2 in graph A? (2 points) c. In graph A, what has caused the movement from point A to point B on line A2? (2 points) d. If there is a lump-sum tax increase causing line A2 to shift to A1, then in graph B, what will happen to B2? (2 points) e. If Canadian average income increases, how line A2 in graph A and line B2 in graph B will be affected? (2 points)QUESTION 2 What effects would each of the following changes have on aggregate demand if other things equal? Explain why. (8 points) Change in Explain why Canadian AD (increase or decrease) (a) Increase in expected return on investment (0) Decrease in the Canadian price level relative to other countries (b) Decrease in consumer condence (d) If the national incomes of our major international trading partners (such as US) were to rise