a)Draw an aggregate demand and aggregate supply diagram to illustrate the effect of increased investment

a) Draw an aggregate demand and aggregate supply diagram to illustrate the effect of increased investment

into the digital retail market by firms such as Adidas on the general level of income in the economy. Explain also in words.

b) In relation to your answer to a) comment on the potential macroeconomic risks of such continuous increases in investment.

5. Download annual US data on consumption (real personal consumption) and GDP (real gross domestic product) from 1995 until 2018 from FRED and include both in the same graph. Overlay recession bars and copy the graph into your Word document. 

a) Describe the trends in the graph over time. With reference to economic theory explain the reasons for the behaviour you observe for the two series. Comment specifically on the recession periods.

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