4.3.10—AD/AS shifts vs movements

A movement along AD or AS follows a change in the average price level, holding other determinants constant. A shift changes the whole curve because spending, costs or productive capacity change.

Identify the changed variable first, then decide whether the new equilibrium lies on the old curve or requires a new curve.

A higher price level moves the economy along AD; a tax change that alters consumption shifts AD. A wage shock shifts SRAS; a higher price level alone does not.

A new equilibrium point is not automatically a curve shift; compare the original and new determinants.