Purchase Solution

Shifts in the Aggregate Demand and Supply Curves

Not what you're looking for?

Ask Custom Question

Determine whether each of the following would cause a shift of the aggregate demand curve, the aggregate supply curve, neither, or both. What happens to aggregate output and the price level in each case?

a. The price level change
b. Consumer confidence declines
c. The supply of resources increases
d. The wage rate increase.

Purchase this Solution
Solution Summary

The solution discusses shifts in the aggregate demand and supply curves.

Solution Preview

Answer (a):
If the price level changes, then as per the "Law of Demand", the quantity demanded changes. Similarly with a change in the price level, the quantity supplied changes. AD and AS curve can both shift with the increase or decrease in prices. The impact ...

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Phillips Curve

    demand curve rightward c. the short-run aggregate supply curve leftward d. the aggregate demand curve leftward e. both the aggregate demand and the short-run aggregate supply curves leftward By Phillips Curve, the unemployment rate is negatively

  • aggregate output and the price level

    Price Level Changes Neither curves shift. B. Consumer Confidence declines Aggregate Demand curve shifts to the left. Aggregate Supply shifts to the right. C. The Supply of Resources increases Aggregate supply shifts to the right. D.

  • Demand-Supply curve

    Demand-Supply curve (see attached file for diagram) In a demand and supply diagram the x-axis is quantity and the y-axis is price. The two curves are aggregate demand and aggregate supply.

  • Effects of Changes in Nominal Money Supply and Price Levels

    An increase in government purchases shifts the IS curve and affects aggregate demand. An increase in price affects the real money supply and shifts the LM curve. Aggregate quantity of output demanded also changes.

  • Macroeconomic Prescription for the Near Future

    Aggregate Demand, Aggregate Supply, and Inflation Aggregate Demand: the total demand for all goods and services in the economy.

  • Aggregate Demand and Supply

    438460 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?

  • Aggregate Demand and Supply Curves

    584429 Aggregate Demand and Supply Curves I am trying to understand shifts in the aggregate supply and demand curves. What happens to aggregate demand and aggregate supply when a tax is raised or imposed? Which direction to they shift and why?

  • Annotated answers to common Macroeconomics test questions

    Topics covered include shifts in the aggregate supply and aggregate demand curves, and changes in GDP and price levels.

  • AD/AS, IS/LM, Keynesian Cross, Money Mkts. & fiscal policy.

    Economists thought of the macro economy as just an aggregate of market supply and demand curves where shifts in supply in demand in one market would just be balanced by shifts of supply and demand in other markets leading to shifts in what gets produced

View More Related Solutions