Assume that Canada is initially in long run equilibrium with price level of P1 and GDP...

 

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Assume that Canada is initially in long run equilibrium with price level of P1 and GDP of Y1. Discuss how each of the following events would affect aggregate demand, the price level and real GDP of Canada. Show your results graphically. a. There is a sharp fall in Canada's exchange rate b. A wave of pro-Canadian sentiment sweeps the U.S. and people in U.S. increase their consumption of Canadian goods c. Due to a global health concern, there is a travel restriction of foreign travellers coming to Canada Assume that Canada is initially in long run equilibrium with price level of P1 and GDP of Y1. Discuss how each of the following events would affect aggregate demand, the price level and real GDP of Canada. Show your results graphically. a. There is a sharp fall in Canada's exchange rate b. A wave of pro-Canadian sentiment sweeps the U.S. and people in U.S. increase their consumption of Canadian goods c. Due to a global health concern, there is a travel restriction of foreign travellers coming to Canada

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