What are some sources of shifts in the aggregate demand curve?

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What are some sources of shifts in the aggregate demand curve?



Answer: Movements along the aggregate demand curve are associated with changes in the price level of final goods. Changes in other conditions can cause shifts in the curve. Among the sources of shifts are changes in consumer or business expectations, changes in policy regarding government purchases, taxes, and money; and changes in the world economy. Because of the multiplier effect, an initial $1 change in any of the components will cause the curve to shift to the right or left by more than $1.

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