7- ) (Aggregate Demand and Supply) Determine whether each of the following would

Question

7- ) (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 curve shifts, and in which direction? What happens to aggregate output and the price level in each case?
a. The price level changes
b. Consumer confidence declines
c. The supply of resources increases
d. The wage rate increases??8- ) How are economic fluctuations linked among national economies? Could a recession in the United States trigger a recession abroad?? ?9-) Is it possible for the price level fall (deflation) while production and employment both rise? (Hint: Use AD-AS Model)??10-) (Shifts in the PPF) Do you think the September 11, 2001 attacks on the World Trade Center and the Pentagon affected short and/or long-term productivity in the United States?

Explanation / Answer

B. will cause the demand curve to shift to the left.Both price and quantity will decrease. C. will cause the supply curve to shift to the right.The price will decrease while the quantity will increase. A and D will cause the changes on the same demand and supply curve.

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