CAIE A-Level Economics 4.3.10 AD/AS shifts vs movements

CAIE A-Level Economics 4.3.10 AD/AS shifts vs movements
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise separating movements along AD or AS from curve shifts, using labelled diagrams and changes in price level or conditions.

How this is tested

  • distinguish a movement along AS from a shift using price level versus cost conditions
  • explain with a labelled AD/AS diagram what causes a movement and what shifts the curve

Question 18

[Maximum number: 1]

The diagram shows an economy's aggregate demand curve.

Figure for Question 18 — CAIE A-Level Economics

What explains the downward movement from L to M along the AD curve?

A

an increase in tariffs leading to decreased imports

B

a decrease in taxes on firms, causing an increase in short-run aggregate supply

C

an increase in consumer confidence, prompting higher spending on local goods as well as imports

D

a slow-down in economic activity, resulting in decreased investment spending