Mt445 Unit 8

Unit 8 Assignment

Student Name

Please answer the following questions. Submit as a Microsoft Word document to the Dropbox when completed.

Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, neither, or both. Which curve shifts, and in which direction? What happens to aggregate output and the price level in each case?

a. The price level changes

i. Which curve shifts? neither

ii. Which direction does it shift?

iii. What happens to aggregate output?

iv. What happens to the price level?

b. Consumer confidence declines

i. Which curve shifts? AD

ii. Which direction does it shift? Inward

iii. What happens to aggregate output? Decreases

iv. What happens to the price level? Decreases

c. The supply of resources increases

i. Which curve shifts?

ii. Which direction does it shift?

iii. What happens to aggregate output?

iv. What happens to the price level?

d. The wage rate increases

i. Which curve shifts?

ii. Which direction does it shift?

iii. What happens to aggregate output?

iv. What happens to the price level?

Determine whether the following statements are true or false.

i. Some people who are officially unemployed are not in the labor force.

False

ii. Some people in the labor force are not working. True

iii. Everyone who is not unemployed is in the labor force.

False

iv. Some people who are not working are not unemployed.

True

Refer to the following data on the U.S. consumer price index and answer the questions below.

Year CPI Year CPI Year CPI Year CPI 1988 118.3 1993 144.5 1998 163.0 2003 184.0 1989 124.0 1994