Just Need Short Answer Questions:

1. Explain why wages depend on the expected price level () rather than the actual price level (P)?
2. Mention and explain two (2) limitations of the Consumer Price Index
3. When economists want to dig deeper and look at the state of health of the country, they look at three basic variables. List and explain these variables.
4. Given (a) Y = [1/(1-c1)][c0-c1T + I +G], explain the effect of a change in the multiplier from 1/(1-c1) to 1/(1-c1-b1) in (b) Y=[1/(1-c1-b1)][c0-c1T+b0-b2i+G]

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