1. Using AS-AD model explain how GDP, price level and unemployment change if investors become optimistic about future and increase their investments?

2)Explain how fiscal policy could be used to close an output gap.

3)

True, false. Explain your answer.

a. If the government decides to sell more bonds, demand for bonds will increase in the bond market and price of bonds will increase.

b. In the market of money supply of money has a positive slope.

c. Demand for Canadian dollars will increase in the foreign exchange markets if foreigners decide to buy more assets in Canada.