ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the AD curve shifts to the right, then the equilibrium quantity of output and the price level will rise. If the AD curve shifts to the left, then the equilibrium quantity of output and the price level will fall.

Detailed explanation-2: -A shift of the AD curve to the right means that at least one of these components increased so that a greater amount of total spending would occur at every price level. This is called a positive demand shock.

Detailed explanation-3: -Productivity growth shifts AS to the right. A shift in the SRAS curve to the right will result in a greater real GDP and downward pressure on the price level, if aggregate demand remains unchanged.

Detailed explanation-4: -An increase in purchasing power means greater spending. Therefore, an increase in spending results in the rightward or outward shift of the IS curve.