.Ul 10. 11. 12. 13. What are the components of aggregate demand? Draw the Aggregate Demand and Aggregate Supply curves for an economy and label the diagram. What is meant by Potential GDP (Long Run Aggregate Supply]? Draw the Long Run Aggregate Supply if there is a recessionary gap. Explain how there could be an increase LongRun AS {Potential GDP)? What does RGDP mean? Why do we need to use RCDP to monitor economic growth? Use and ADIAS model to show what happens if there is a) a decrease in consumption spending b) a decrease in the HST c) an incentive for businesses to increase labour productivity d) a decrease in interest rates e) an increase in government spending Identify three leakages in the Canadian economy. Ii the government spends $10 million to build health care facilities, how much can the GDP increase because of the multiplier effect if we assume that leakages are 45% of all new spending? If the government reduces taxes by $20 million, how much mall the GDP change if leakages are 50% of new spending? The multiplier predicts the total effect of a change in taxes. However, what else might happen if taxes are changed? 14. How bad is Canada's debt? Explain with reference to the DehttoCDP ratio. 15. Explain a government budget surplus and budget decit. If the government has a surplus budget next year what will happen to its debt? What if they have a decit budget? 10. How does the government borrow money? 1?. Explain the equation W = PQ. How is the money supply related to Gross Domestic Product? 18. What is the target for the overnight rate? How does it inuence other interest rates? 19. What effect do changes in the Bank of Canada interest rate have on the Gross Domestic Product? 20. 21. 22. Explain the process. Estimate the potenh'al impact on the money supply if a chartered bank received a deposit of $1,000 and kept only 20% in reserve? What type of money makes up the majority of the money supply? Explain two methods the Bank of Canada can use to control the money supply