3. Impact on Equilibrium GDP (8 points)

For each situation listed below, state whether the change will cause U.S. aggregate

expenditures, and therefore equilibrium GDP, to increase or decrease and explain

why it will either increase or decrease.

Complete all two parts (a-b).

a. Increased disposable incomes for Americans, as reflected by the increased hourly

wages reported upon in the November 2021 Employment Report, while foreign

incomes do not change.

b. Inflation in the United States that is greater than inflation in other nations.