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Get PriceFigure 1. Shifts in Aggregate Demand. (a) An increase in consumer confidence or business confidence can shift AD to the right, from AD 0 to AD AD shifts to the right, the new equilibrium (E 1) will have a higher quantity of output and also a higher price level compared with the original equilibrium (E 0).In this example, the new equilibrium (E 1) is also closer to potential GDP.
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