Chapter 19 - (Aggregate Demand and Supply Determine whether...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 19 15. (Aggregate Demand and Supply) 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 curves shifts, and in which direction? What happens to aggregate output and the price level in each case? a. The price level changes : this would affect both aggregated demand and supply curve. A fall in the price levels raises the overall quantity of goods demanded. An increase in the expected price level reduces the quantity of goods and services supplied and shift the short-run aggregate supply curve to the left. A decrease in the expected price level raises the quantity of goods and services supplied and shift the short-run aggregate supply curve to the right. b. Consumers confidence declines: A decrease in consumer confidence causes a decrease of the aggregate demand curve, a leftward shift. c. The supply of resources increases: This will affect the demand curve because more products can be produced than what are being demanded. So there will be leftward shift d. The wage rate increases:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/01/2010 for the course ECON ECON 330 taught by Professor Geubelle,p during the Spring '10 term at Indiana Wesleyan.

Page1 / 3

Chapter 19 - (Aggregate Demand and Supply Determine whether...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online