1. For Canada, the demand pressures generated by the U.S. tax cut and the spillover effects of increased U.S. defense spending will push the Canadian economy further into an excess demand situation.
a. How will the U.S. tax cut and the increased U.S. defense spending influence the U.S. economy?
b. What name do economists give to this kind of government action?
c. How would this effect influence the Canadian economy?