Question: Using the Aggregate Demand(AD)-Aggregate Supply(AS) model, examine the possible impact on Malaysia's GDP and price level in the following situation: (i) In 2012, the Government

Using the Aggregate Demand(AD)-Aggregate Supply(AS) model, examine the possible impact on Malaysia's GDP and price level in the following situation:

(i) In 2012, the Government will give every student RM 100 to spend while households with income below RM 3000 will be given RM 500 each. (4 marks)

(ii)Exports to the European Union have dropped during these two years due to the financial crisis in some of the member countries. (4 marks)

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