Determine whether each of the following would cause a shift of the aggregate demand curve, a...

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

1] The price level changes.

2] Consumer confidence increases.

3] The supply of resources decreases.

4] The wage rate decreases.

Expert Solution

The aggregate supply aggregate demand model explains how the extent of price and output are determined in an economy. It uses the mixture supply curve and aggregate demand curve to point the equilibrium price and output.
Aggregate demand: The demand of the final goods which are produced in the economy in a given year.
Aggregate supply: Aggregate supply curve shows the connection between the products supplied by nations' suppliers and nation's overall price index .

1.To determine The shifts and directions of aggregate demand and provide curve when the worth level changes and its effect to output and price index . Changes in supply and demand impact the worth of products and services. However, in the most general sense or cases (that is under ceteris paribus conditions), an increase in aggregate demand corresponds or coincides with an increase in the price level.Increasing any of these components shifts the AD curve to the proper , resulting in a greater real GDP and to upward pressure on the worth level. Reducing or decreases any of the components shifts the AD curve to the left, resulting in a lower real GDP and a lower cost level.

2.To determine The shifts and directions of aggregate demand and supply curve when the consumer confidence increases and its effect to output and price level. If, consumer confidence is bound to increase. The household sector is thus inclined to spend freely, especially on durables like cars, houses, furniture, and appliances. The result's that this increase in consumer confidence causes a rise in consumption expenditures and subsequently a rise aggregate demand. An increase in consumer confidence causes a rise (rightward shift) of the mixture demand curve. A decrease in consumer confidence causes a decrease (leftward shift) of the mixture demand curve. If buyers find that they "like" an honest more, then their demand increases.

3.To determine the shifts and directions of aggregate demand and supply curve when the supply of resources decreases and its effect to output and price level. Lower Resource is a decrease in resource prices causes an increase in supply and a rightward shift of the supply curve. With the lower prices, cost falls and therefore the ability to supply the great is enhanced. As such sellers sell more of the good.decrease in any of the resource prices causes a decrease the production cost. Suppose, for instance , that the worth of thread wont to stitch together Stuffed Amigos declines. If the price remains not constant,then the supply decreases.

4.To determine The shifts and directions of aggregate demand and supply curve when the wage rate decreases and its effect to output and price level. An upward curve within the wages causes a decrease (leftward shift) of the short-run aggregate supply curve. A decrease within the wages causes a rise (rightward shift) of the short-run aggregate supply curve. Higher wages increase the overall cost production. Lower wages decrease the overall cost(revenue) production

Rahul Sunny answered 1 year ago

Determine whether the events below will cause the aggregate demand curve to shift to the left or to the right.

Determine whether the events below will cause the aggregate demand curve to shift to the left or to the right. Assume the price le remains constant a. Government purchases increase by $2 billion. Aggregate demand shifts (Click to select) b. Real interest rates increase. Aggregate demand shifts (Click to select) c. Taxes increase. Aggregate demand shifts (Click to select) d. Aggregate consumption decreases as consumer confidence falls. Aggregate demand shifts (Click to select) .

Explain the changes that would cause the dynamic aggregate demand curve to shift.

Which of the following will cause the aggregate demand curve to shift to the right ?...

Which of the following will cause the aggregate demand curve to shift to the right ? a. A decrease in household wealth b. A decrease in the price level c. Consumer expectations of higher future income d. An increase in the interest rate Which of the following events would most likely caused the increase in aggregate demand a. An increase in interest rates b. An increase in household wealth c. A decrease in consumer confidence d. A decrease in the...

State which of the following changes cause a shift in the aggregate demand curve and which...

State which of the following changes cause a shift in the aggregate demand curve and which ones are a movement along it. Also provide the direction of the change. A cut in government purchases. A crash in the U.S. stock market. A shift to a lower inflation target in the monetary policy rule. Being thrifty now becoming fashionable. An increase in the European interest rate.

Identify whether each of the below events would cause a shift in AD or AS: Aggregate...

Identify whether each of the below events would cause a shift in AD or AS: Aggregate Demand Aggregate Supply Shift to the Right Shift to the left The government announces a 1% increase of VAT (Value-added Tax) There is a sustained drought for 1 year on major plant fields There is a sustained increase in the value of the Saudi Riyal against the Pound on the foreign exchange market The government announces spending on a new rail-way between Jeddah and...

Which of the following situations would cause a shift in the demand curve, as opposed to...

Which of the following situations would cause a shift in the demand curve, as opposed to a change in the quantity demanded? Vegetable prices rise as the majority of the population no longer eats meat. Auto sales increase due to increased employment. Gasoline consumption decreases as the taxes included in the price of gasoline increase. Both A and B.

1. which of the following would cause a definite leftward shift of the demand curve? a)...

1. which of the following would cause a definite leftward shift of the demand curve? a) an expectation by consumers of a lower price and an increase in the price of a compliments b) an expectation by consumers of lower income and an increase in the price of a substitute c) a decrease in the number of consumers and a decrease in income (assume inferior good) d) a decrease in income and a positive change in consumer tastes 2. When...

What are some factors which would cause a shift in either aggregate supply or aggregate demand?...

What are some factors which would cause a shift in either aggregate supply or aggregate demand? If our oil suppliers suddenly stopped selling oil to the U.S., which curve would shift? What would then happen to our economy? Neat handwriting if written please.

Which other factors would shift the U.S. aggregate demand curve

Determine whether there will be a movement along with the demand /supply curve or a shift...

Determine whether there will be a movement along with the demand /supply curve or a shift in the demand /supply curve. if there is a shift in the curve ,indicate the direction of the shift :- 1. an increase in the price of complement in production. 2.a decrease in the taste of consumers for a product. 3.a decrease in the number of buyers in the market. 4. a lowering of the product price. 5.a worsening of business expectations. 6. a...

Question