CAIE A-Level Economics AS 4.3.5 Ad Shifts Questions

Practise explaining rightward and leftward AD shifts using fiscal policy, interest rates, confidence, exchange rates, trade and the four aggregate-demand components.

Exam points

Explain how changes in consumption, investment, government spending and net exports shift the aggregate demand curve to the right or left.

[Maximum number: 1]

The diagram shows a shift in the Aggregate Demand curve, from $A D_{1}$ to $A D_{2}$ .

Figure for Question CAIE A-Level Economics AS 4.3.5 Ad Shifts Questions question 1 — CAIE A-Level Economics AS

What might have caused this shift?

a fall in the budget surplus

a fall in the trade surplus

a rise in imports

a rise in the interest rate

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CAIE A-Level Economics AS 4.3.5 Ad Shifts Questions question 1