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Movement Along or Shift of Aggregate Demand

Study Edexcel Economics aggregate-demand diagrams by separating movements along AD from shifts caused by changes in its determinants.

Syllabus
2019
Course
Economics YEC11
Level
AS

Exam points

  • Distinguish a movement along AD from a shift of AD by checking whether the price level or a determinant changes.
  • Recognise that higher consumption increases aggregate demand and shifts the AD curve to the right.
  • Use the diagram’s direction of change from AD to AD1 to identify the most likely cause.

2.3.2.1c - distinction between a movement along, and a shift of, the AD curve question 1

[Maximum number: 1]

The diagram shows aggregate supply and aggregate demand for an economy. Which one was the most likely cause of the change from AD to AD1?

A

A decrease in government spending

B

An increase in interest rates

C

A decrease in net exports

D

An increase in consumption

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