Assume that Canada is initially in long run equilibrium. Discuss how each of the following four events would affect aggregate demand, the price level and real GDP of Canada There is a sharp rise in Canada’s exchange rate The Canadian Federal Government cut the Corporate Income Tax significantly. There is a recession in China, which is a large importer of Canadian agricultural goods Due to a global health concern, there is a travel restriction of foreign travellers coming to Canada

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that Canada is initially in long run equilibrium. Discuss how each of the following four events would affect aggregate demand, the price level and real GDP of Canada

There is a sharp rise in Canada’s exchange rate

The Canadian Federal Government cut the Corporate Income Tax significantly.

There is a recession in China, which is a large importer of Canadian agricultural goods

Due to a global health concern, there is a travel restriction of foreign travellers coming to Canada

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