CSU Price Changes Do Not Cause Shifts in Aggregate Demand & Supply Curve Questions

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gurtbqsngure06

Economics

Columbia Southern University

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Question 1 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. There is no minimum word requirement for responses. Please label each section of your response with the appropriate number (1, 2, 3, 4). QUESTION 2 1. Compare the classical economic theory that was used prior to the Great Depression to the Keynesian theory used after the Great Depression. Your response must be at least 200 words in length. QUESTION 3 1. Explain how gross domestic product is calculated using each of the following: the income approach and the expenditure approach. Your response must be at least 200 words in length.
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Macroeconomics

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Question 1
1. Price changes do not cause any shifts in the aggregate demand and supply curve. Instead,
they cause movements along the curves, depending on the nature of the change (Dean et al.,
2020). An increase in prices causes an upward movement to the left along the demand curve,
indicating a decrease in the quantity demanded. Meanwhile, the increase causes an upward
movement to the right, indicating an increase in the quantity supplied.
2. Increased consumer confidence causes a shift to the right in the aggregate demand curve.
This is because consumers develop more preference for commodities. Hence, the positive
changes in taste cause an increase in the quantity demanded at every price level, shifting the
aggregate demand curve to the right.
3. A decrease in the supply of resources causes the aggregate supply curve to shift to the left.
Reduced input levels (resources) mean lower levels of production...


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