Aggregate demand curve

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a. A dramatic slowdown of the world economic growth caused in large part by COVID - 19 crisis led to a reduction of foreign demand for Canadian products. Show the effect on the Aggregate Expenditure function, and explain if an Aggregate Demand curve will shift rightward, leftward, stays the same or the movement will be along the Aggregate Demand curve. Support your answer with graphs and words.

b. Explain how events such as those described in (a) above (that is, the reduced foreign demand for Canadian goods) will affect the price level in Canada. Show the effect of the price level change on the Aggregate Expenditure function, and also on the Aggregate Demand curve by showing if the Aggregate Demand will shift rightward, leftward, stays the same or the movement will be along the Aggregate Demand curve. Support your answer with graphs and words.

Reference no: EM132558988

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