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The AD curve shifts to the right when at least one of its four components rises. What must happen for the AD curve to shift left instead?
AOne of C, I, G, or net exports must fall
BThe price level must rise, moving buyers along the curve
CAggregate supply must fall for any reason at all
DPotential GDP must permanently shrink first
Answer & Solution
Correct answer: A. One of C, I, G, or net exports must fall
1. AD is built from four spending components: consumption, investment, government spending, and net exports.
2. A leftward AD shift means total spending falls at every price level, which requires at least one component to fall.
3. A change in the price level alone moves buyers along a fixed AD curve; it does not shift the curve.
4. Option C confuses a change in aggregate supply with a change in aggregate demand, which are different curves.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 10 "The Aggregate Demand/Aggregate Supply Model", section 10.4 | Shifts in Aggregate Demand_
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