Your Assignment 2 relates to chapters 4 (Demand, Supply, and Markets), 9 (Aggregate Expemditure and Aggregate Demand) and 10 (Aggregate Supply) respectively.. You will be answerring questions related to the concepts of economic fluctuations and aggregate demand and supply.
Your assignment is worth 6 pts, and each of the questions must have at least a half of page of writing supported by more than the textbook refererence. In addition your answers must prescribe to APA format.. You must submit a cover page, each question in a page by itself, and your references page must be also in a page by itself. And, please do not forget to reference your in-text. Lastly your assignment must be submitted via “Safeassign” in order to obtain your max points your work must be original in at least 70%.
Answer the following questions:
– Explain the effect of an increase in consumer income on the demand for a good.
– In your own words, explain the logic of the income-expenditure model. What determines the amount of real GDP demanded?
– Define the economy’s potential output. What factors help determine potential output?
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