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    Aggregate Demand and Supply

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    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
    b. consumer confidence declines
    c. the supply of resources increases
    d. the wage rate increases

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    a. the price level: Changes in price level would cause a movement along the supply and the demand curve. For instance, if the price level ...

    Solution Summary

    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
    b. consumer confidence declines
    c. the supply of resources increases
    d. the wage rate increases

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