Aggregate demand and supply model

Reference no: EM1369041

Say there is an annual event that brings a state over 40 million dollars on the week that it runs, bringing tourists from all over the world to the event and millions of dollars from television coverage.

What is the expended change to gross product and the price level likely to be in the short run? How can this be illustrated by an aggregate demand and supply model?

If I assume that the expenditure by the government on this event increases the government's deficit. what will be the likely effect on private sector savings and investment using the loanable funds model?

Reference no: EM1369041

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