ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The aggregate demand curve, or AD curve, shifts to the right as the components of aggregate demand-consumption spending, investment spending, government spending, and spending on exports minus imports-rise. The AD curve will shift back to the left as these components fall.

Detailed explanation-2: -Shifting the Aggregate Demand Curve The aggregate demand curve tends to shift to the left when total consumer spending declines. 2 Consumers might spend less because the cost of living is rising or because government taxes have increased.

Detailed explanation-3: -Since the aggregate demand/aggregate supply (AD/AS) model represents price as price level and quantity as output, a rightward shift of the aggregate demand curve results in an increase in the price level and an increase in output.

Detailed explanation-4: -If the aggregate supply-also referred to as the short-run aggregate supply or SRAS-curve shifts to the right, then a greater quantity of real GDP is produced at every price level. If the aggregate supply curve shifts to the left, then a lower quantity of real GDP is produced at every price level.

Detailed explanation-5: -As household wealth increases, aggregate demand typically increases. Conversely, a decline in wealth usually leads to lower aggregate demand.