1.The Canadian consumer confidence rebounded sharply in September 2012. This is a significant rebound since the plunge in October 2008. According to some analysts, the good news from Europe and the...

1.The Canadian consumer confidence rebounded sharply in September 2012. This is a significant rebound since the plunge in October 2008. According to some analysts, the good news from Europe and the jump in the stock market appear to have had an effect on Canadian consumer confidence. (10 marks)a.Explain the various factors that buoyed the Canadian consumer confidence in 2012.c.If the economy was operating at full- employment equilibrium, describe the state of equilibrium after the increase in consumer confidence. In what way might consumer expectations have a self-fulfilling prophecy?e.Explain how the economy can adjust in the long run to restore full-employment equilibrium. Draw a graph to illustrate this adjustment process.