The Aggregate Demand Curve. Aggregate demand is the total demand for goods and services in the economy. The aggregate demand (AD) curve is a curve that shows the negative relationship between aggregate output (income) and the price level. Deriving the Aggregate Demand Curve.
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equilibrium conditionAggregate Expenditure andAggregate Demand
How are aggregate demand and aggregate expenditure related?
Expansionary monetary policyMsAD curve shifts to the right
Expansionary fiscal policyGAD curve shifts to the right
TAD curve shifts to the right
Contractionary monetary policyMsAD curve shifts to the left
Contractionary fiscal policyGAD curve shifts to the left
TAD curve shifts to the leftShifts of the Aggregate Demand Curve
Shifts to the RightIncreases in Aggregate Supply
Shifts to the LeftDecreases in Aggregate Supply
Bad weather, natural disasters, destruction from warsShifts of the Short-RunAggregate Supply Curve