Question: 1. Describe the wealth effect, the interest rate effect, and the foreign price effect. Discuss how these effects are connected? 2. During the spring of

1. Describe the wealth effect, the interest rate effect, and the foreign price effect. Discuss how these effects are connected?

2. During the spring of 2014 the Midwestern U.S., which has a large agricultural base, experiences above-average rainfall. Draw the AD/AS diagram, what is the effect on output, the price level, and employment? (This graph does not require data. Photos of your work or hand drawn graphs will have 10 points deducted. If you need a refresher in drawing a simple graph or the link below fails please go back to module 4.)

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