Explain why a change in one component of aggregate demand will cause

the aggregate demand curve to shift by a multiple of the initial change.

How would an increase in the supply of labor affect the natural level of

employment and potential output? How would it affect the real wage,

the level of real GDP, and the price level in the short run? How would it

affect long-run aggregate supply? What kind of gaps would be created?

Give three reasons for the downward slope of the aggregate demand

curve.