Mt445 Unit 8

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Unit 8 Assignment

Student Name: Escale Cintron

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 one of the curves would shifts but a change in the price would cause a movement within the curves. ii. Which direction does it shift?

Neither
iii. What happens to aggregate output?

Neither
iv. What happens to the price level?

Neither
b.Consumer confidence declines

i. Which curve shifts?

The aggregate demand would shift.
ii. Which direction does it shift?

It would shift to the left.
iii. What happens to aggregate output?

The aggregate output would fall.
iv. What happens to the price level?
The price would also fall.

c. The supply of resources increases

i. Which curve shifts?
The aggregate supply curve would shift.

ii. Which direction does it shift?

It would shift to the right.
iii. What happens to aggregate output?
The aggregate output would increase.

iv. What happens to the price level?

The price level would fall.
d. The wage rate increases

i. Which curve shifts?
For the reason that the input costs would be higher it would be the aggregate supply that would shift.

ii. Which direction does it shift?

The direction that it will shift is left.
iii. What happens to aggregate output?

The aggregate output would fall.
iv. What happens to the price level?

The price level would increase.

Determine whether the following statements are true or false.

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