Q. 1. GM announced which it will close its Oshawa truck plant in 2009 also a Windsor transmission plant in 2010. Ford also plans a 10 percent (%) cut in white-collar, salaried positions. In total, over 4000 direct works will be lost. This is chilling news for Ontario because for every work in an assembly plant, there are 7.5 works with auto-parts suppliers also other companies. Using appropriate diagrams, answer the subsequent questions.

a. Is there a trade-off between the unemployment rate also the inflation rate in the short-run? How can the Phillips curve be utilized to answer this question?

b. Illustrate what is the relationship between the Phillips curve, cumulative demand also cumulative provide?

c. If the unemployment rate also inflation are both rising, can this be explained by a movement along a given Phillips curve? Illustrate what must be happening to cumulative demand also cumulative provide? Illustrate what must be happening to the Phillips curve?

d. If the Bank of Canada continues to take expansionary monetary policy, how is the unemployment rates also inflation involved? (Utilize both Phillips curve also AS-AD graphs in your explanation.)

e. Is there a trade-off between the unemployment rates also inflation in the long run? How is the long-run cumulative providing curve connected to the long run Phillips curve?