CAIE A-Level Economics 4.3.5 Aggregate Demand Shifts

CAIE A-Level Economics 4.3.5 Aggregate Demand Shifts
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise shifting aggregate demand from changes in consumption, investment, government spending or net exports and separating these shifts from price-level movements.

How this is tested

  • map the event to consumption, investment, government spending or net exports before shifting AD
  • draw a rightward or leftward AD shift while keeping the general price level as an axis variable
  • distinguish a price-level movement along AD from policy, confidence or external-demand shifts

Question 20

[Maximum number: 1]

The aggregate demand (AD) curve in an economy shifts to the left.
What is most likely to cause this shift?

A

a decrease in the exchange rate

B

a decrease in the interest rate

C

an increase in the budget deficit

D

an increase in the current account deficit