An unexpected event that causes the aggregate demand curve to shift inward or outward is an
A) aggregate demand shock.
B) aggregate supply shock.
C) aggregate supply increase.
D) aggregate supply decrease.

Question

Quizplus · Accepted Answer

An unexpected event that causes the aggregate demand curve to shift inward or outward is known as an aggregate demand shock. Examples of aggregate demand shocks include sudden changes in consumer confidence or government spending, changes in exchange rates, or unexpected shifts in global demand for a country's goods and services. These events can cause a sudden increase or decrease in aggregate demand, leading to corresponding shifts in the AD curve.

An Unexpected Event That Causes the Aggregate Demand Curve to Shift