is equal to the sum of net exports, consumption, investment and government spending at a given price level.
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why does shift occur in AD?
AD shfts because any change in consumption, investement, goverment spending, exports or imports. this could be changed cause of behaviour or gov policy
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what is a demand shock?
it is anything positve or negative that causes AD to change
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what are the examples of negative shock?
an interest rate rise, a collapse in the housing market etc
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why does movement occur along the AD curve?
movements along the AD can be caused by the change in avergae price level (the two have inverse relationship)
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Card 2
Front
why does shift occur in AD?
Back
AD shfts because any change in consumption, investement, goverment spending, exports or imports. this could be changed cause of behaviour or gov policy
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