Problem
1. What will be the effect on aggregate demand of each of the following?
(a) A strike in the docks which prevents the loading and unloading of exports and imports.
(b) Technological advances which improve the productivity of capital.
(c) A decrease in the expected rate of inflation.
(d) A budget deficit.
2. How would the slope of the aggregate demand curve in an economy differ if the real balance effect was (i) relatively strong; (ii) relatively weak?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.