Question 1 Your friend argues real GDP per capita is a good measure of economic well-being, as it shows the income levels of the country. Provide some counter arguments that show some limitations of the GDP measure.

Question 2

The government of Canada has taken a move to increase income tax for consumers and firms. Using the AS-AD model show the impact of this policy on the short-run. How will the economy adjust itself in the long-run? Provide diagrams with your explanation.

Question 3

The government of country Alpha has made day-care free for the children of the country, which has contributed to increasing the participation of women in the labour force of the country. Using the lessons from the course, discuss how such a policy can impact economic growth in the country. Use diagrams as necessary.

Question 4

In light of the Covid-19 virus, what kind of open market operations should the government follow in order to expand demand in the economy? Describe the full process, including impact on GDP (with graphs)

Section B: Essay Question (40 marks)

Write an essay between 500 to 700 words to describe the differences between the economic recession in 2008 in the U.S with the current economic recession happening in the U.S.

Compare the underlining causes of theses two recessions with each other by using the knowledge of AS-AD model.