Hello, how do I approach the following question?

2. This question will concentrate on using our ALE-AD model to understand the economic consequences of the CUVID-IQ pandemic, as well as policies currently being enacted or considered. Imagine that the Canadian economy, described by our :1wa model, is in long-run equilibrium at the end of January, 2020. (a) In early February, fear of a pandemic causes business outlookfexpectations to worsen, and the stock market falls signicantly. What eect will this have in the short-run? Carefully explain the reasoning for the effects that you illustrate on your diagram. Be sure to discuss price levels, unemployment, and real GDP levels. Total of 8 Marks (5 marks explanation, 3 marks graph) (b) By late March nearly 1 million Canadians have applied to Employment Insurance (El) in Canada. Carefully discuss how El acts as an automatic stabilizer for the economy, including a graph in your explanation. Total of 6 Marks {4 marks explanation, 2 marks graph) (c) As an increasingly number of Canadians have lost their income due to lay-os and furloughs, The Government of Canada is concerned that Canadians do not have the wealth or income to afford necessities. A number of new policies are enacted to help support Canadians through the economic fallout of the pandemic, including the Canadian Emergency Response Benet [CERB). Under this program, Canadians who have lost their income due to COVE-19 can apply to receive $2000 a month for a maximum of 16 weeks {assume that this is after-tax income). Carefully explain how this policy will inuence our AS-AD model of the Canadian economy. Total of 8 Marks [5 marks explanation, 3 marks graph} (d) Do you think the simple multiplier will be large or small for CERB? Do you think the multiplier would be similar in size to the simple multiplier? W'hy? Several other policies have been proposed by commentators, including a reduction to the capital gains tax, as well as the payroll tax. In case you are unfamiliar with these: ' 0 Capital gains tax: a tax on an increase in value of an investment (ex. stocks, mutual funds}. 0 Payroll tax: a tax applied to wages, salaries, and for tips earned by employees. Do you think each of these policies would have the same size of multiplier as CERB? Carefully explain your reasoning [for each policy). Total of 1|] Marks (4 marks for CERB explanation, 3 marks for each alternative policy explanation}