ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Any fluctuation in the price level will cause movement along the aggregate demand curve.

Detailed explanation-2: -In general, a change in the price level, with all other determinants of aggregate demand unchanged, causes a movement along the aggregate demand curve. A movement along an aggregate demand curve is a change in the aggregate quantity of goods and services demanded.

Detailed explanation-3: -Factors that Cause Shifts in Aggregate Demand An increase in any of the components of aggregate demand – consumption spending, investment spending, government spending, and net exports (X-M) – shifts the aggregate demand curve to the right, and a fall in any of these components shifts it to the left.

Detailed explanation-4: -This downward slope indicates that increases in the price level of outputs lead to a lower quantity of total spending. The graph shows a downward sloping aggregate demand curve, showing that, as the price level rises, the amount of total spending on domestic goods and services declines.

Detailed explanation-5: -Answer and Explanation: The answer is false. The aggregate demand curve tells you what the Real GDP level is at any given price, so when the price level increases, you would just move to a different point on the aggregate demand curve.