ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Along the AD curve, real GDP increases and the price level decreases. In other words, AD slopes down. Changes in the price level will cause a movement along the AD curve.

Detailed explanation-2: -Finally, AD depends on the relative price of foreign and domestic goods, which impacts imports and exports. A decline in the relative price of domestic goods increases AD.

Detailed explanation-3: -Decreasing any of the components shifts the AD curve to the left, leading to a lower real GDP and a lower price level.

Detailed explanation-4: -The reduction in aggregate demand or supply will cause unemployment to increase as the change in price level lead to a change in output. The price level decreases when aggregate demand decreases and increases when aggregate supply decreases.