The aggregate demand curve shifts when the quantity of real GDP demanded at every price level changes.

Question

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The aggregate demand curve shows the relationship between the quantity of real GDP demanded and the price level. When there is a change in the quantity of real GDP demanded at every price level, the aggregate demand curve shifts. For example, if consumer confidence increases, causing people to spend more and businesses to invest more, then the quantity of real GDP demanded at every price level will increase, causing the aggregate demand curve to shift to the right.

The Aggregate Demand Curve Shifts When the Quantity of Real