Question: a)Using the AD-AS aggregate model, explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate demand curve, both, or neither. Draw

a)Using the AD-AS aggregate model, explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate demand curve, both, or neither. Draw a diagram to illustrate the effect on the national economy and state the component of aggregate demand that changes (consumption, investment, government purchases, or net exports).

i.Due to uncertainties in the future economy, Malaysian households decide to spend less from their earned income.

(7 marks)

ii.A recession overseas causes foreigners to buy less of Malaysian products.

(7 marks)

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