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AP Macroeconomics
Unit 3 – National Income and Price Determination
Topic 3.7
What is the impact of shocks on the aggregate demand (AD) curve and the economy in the short run and long run?
Shocks lead to immediate adjustments to the AD curve, stabilizing output and unemployment in both the short run and long run.
Shocks cause permanent shifts in the AD curve, leading to long-term changes in output and unemployment.
Shocks cause temporary shifts in the AD curve, leading to short-term changes in output and unemployment.
Shocks have no impact on the AD curve or the economy in either the short run or the long run.
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AP Macroeconomics - 3.7 Long-Run Self-Adjustment
Key terms
Shocks
Aggregate Demand (AD) curve
Long run
Short run
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AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
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