Question: Question1. How does the DD schedule shift if there is a decline in investment demand? Question2. Suppose there is a permanent fall in private aggregate

Question1.How does the DD schedule shift if there is a decline in investment demand?

Question2.Suppose there is a permanent fall in private aggregate demand for a country's output (adownward shift of the entire aggregate demand schedule). What is the effect on output? What government policy response would you recommend?

Question3.A new government is elected and announces that once it is inaugurated, it will increase the money supply. Use the DD-AA model to study the economy's responseto this announcement.

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