Unit 8 Assignment

Student Name: Ceceilia Denny

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, because it will cause the same changes on the demand and supply curve. ii. Which direction does it shift?

No direction iii. What happens to aggregate output?

Nothing iv. What happens to the price level?
Nothing

b. Consumer confidence declines

i. Which curve shifts?
Aggregated demand

ii. Which direction does it shift?

left iii. What happens to aggregate output?

decreases iv. What happens to the price level?

Will cause the demand curve to shift to the left and price and quantity will decrease. c. The supply of resources increases

i. Which curve shifts?

Aggregated supply ii. Which direction does it shift? right iii. What happens to aggregate output? increase iv. What happens to the price level?
Will cuase the supply curve to shift to the right and price will decrease and quantity will increase.

d. The wage rate increases

i. Which curve shifts?
Aggregated supply

ii. Which direction does it shift? left iii. What happens to aggregate output? decrease iv. What happens to the price level?

It will increase and cause the changes on the same demand and supply curve.

Determine whether the following statements are true or false.

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

false