Determine whether each of the following would cause a shift...

Determine whether each of the following would cause a shift in the aggregate demand curve, A shift in the aggregate supply curve, neither, or both. Which curve shifts and which direction? What happens to the aggregate output and the price levels in each case? A the price level changes. Be consumer confidence to clients. See the supply resources increase. D wage rate increases.

Transcript

00:01 So here we're talking about aggregate demand, aggregate supply.

00:04 So the most important thing is setting this up correctly.

00:09 Aggregate demand, aggregate supply is a story about prices and incomes.

00:14 We have a downward sloping aggregate demand, which we usually think of as the sources of expenditure.

00:21 And aggregate supply, which i'd like to think of as business models, right? aggregate supply is telling you how much firms are willing to affect supply at different price points.

00:34 And so i think of it as sort of the business model of firms.

00:38 So a says we have a change in the price level.

00:45 A change in the price level is important because a change in the price level is a movement along the curve, right? if the price level is changing, we are moving along the curve.

00:56 We are not shifting the curve.

00:57 We are only moving along them, right? so this is a movement along both, right? so i would answer this one as neither.

01:09 It does not shift aggregate supply.

01:12 It does not shift aggregate demand.

01:13 It is just moving along the curves, right? now, we could ask why the price level is changing.

01:19 Something must have happened to change the price level, but if the price level is changing, we are just moving along the curves.

01:24 Nothing is shifting.

01:27 B.

01:28 B is more confidence...