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I. 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?
-The price level changes.
-Consumer confidence increases.
-The supply of resources decreases.
-The wage rate decreases.
II. Compare the classical economic theory that was used prior to the Great Depression to the Keynesian theory used after the Great Depression.
III. Explain how gross domestic product is calculated using each of the following: the income approach and the expenditure approach.
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