Scenarios describe economic events in questions 1 and 2. Draw the i) appropriate

LAS/SAS/AD curve(s) beginning in equilibrium. Show ii) any shifts of the curve(s).

Explain iii) what might have caused the curve to shift and iv) the resulting economic situation/characteristics. FULLY LABEL GRAPHS FOR FULL MARKS. Bullet point answers for the explanation portion are preferred.

1) Trouble in paradise... the economy has slipped into a recession.

2)) Life has been good recently and the population of

Canada is generally positive and upbeat in its work

and economic expectations. Most are expecting a

generous increase in their wages over the next few

years.