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  (150 words)

A reference page with at least two references from the FNU Library (LIRN / Library and Information Resources Network) specifically Pro-Quest, and textbook are required, you must also reference your in-text.

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%.

Your assignment grade will be based on the following “Rubrics”

– APA Formatting 20% (running head, page numbering, font style & size, double spacing , margins 1″, paragraphs indents, proper and complete referencing for your references sources, references page hanging indents, in-text referencing)

– References Sources 20% (textbook, two other references from the FNU Library not the Internet)

– Originality Report 20% (70% or higher, titles and references do not count against your work)

– Content Relevancy 20% (100% relevant content to the subject matter)

– Content Volume 20% (it must be at least 150 words of writing per question)

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?