### Review Questions and Answers for Chapter 11 - UCL

and (3) what determines changes in the level of aggregate output. The aggregate model is needed to explain these changes. It simplifies the analysis of prices by combining the ... and the aggreg ate demand -aggregate supply model in graph (B) below. In other words, explain how points 1, 2, and 3 are related to points 1 ', 2', and 3'.