A movement along the aggregate demand curve but not a shift in the aggregate demand curve is created by
A) a change in the quantity of money.
B) an increase in government purchases.
C) a fall in the price level.
D) an increase in nominal GDP.

Question

Quizplus · Accepted Answer

A movement along the aggregate demand curve is caused by a change in the price level. In this case, a fall in the price level would result in an increase in the quantity of real GDP demanded, but it would not shift the entire aggregate demand curve. Changes in the quantity of money (A) and government purchases (B) would shift the aggregate demand curve, while an increase in nominal GDP (D) is simply a result of changes in price level and real GDP and therefore does not cause a movement along the aggregate demand curve.

A Movement Along the Aggregate Demand Curve but Not a Shift