Use the model of aggregate demand and short run aggregate supply to explain how each of the following would affect real gdp and the price level in the short run.  A. Reduction in nominal wages B. Major improvement in technology Reduction in net export

Suppose the people of Canada has reduced their spending on goods and services from the United States.   What will be the effect on real GDP and the price level in the short run? In the long run? Show your results graphically.

For the Canadian economy, what is the least important of the three reasons for the downward slope of the aggregate-demand curve? a. wealth effect b. interest-rate effect c. exchange-rate effect d. real-wage effect

Aggregate Demand and Aggregate Supply (AD-AS) Model (Chapter 13) 5.1 Why does the short-run aggregate supply curve slope upward? 5.2 Explain why the long-run aggregate supply curve is vertical. Then, explain how each of the following events would affect the long-run aggregate supply curve. A lower price levels b. A decrease in the labor force A decrease in the quantity of capital goods d. Technological change a. с. 5.3. Starting from long-run equilibrium, use the basic aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth. Explain how the economy moves back to full employment.