-In the figure above, as the price level increases, the aggregate demand curve will A) shift from AD₁ to AD3 and then back to AD₁. B) not shift, but the aggregate demand curve will change so that it is positively sloped. C) not shift. D) shift from AD₁ to AD3. E) shift from AD₁ to AD₂.

Question

Quizplus · Accepted Answer

The aggregate demand curve represents the total demand for goods and services in an economy at different price levels. An increase in the price level does not shift the aggregate demand curve itself; instead, it moves along the curve. Shifts in the aggregate demand curve are caused by factors other than the price level, such as changes in consumer confidence, government spending, or investment.

-In the Figure Above, as the Price Level Increases, the Aggregate