If the aggregate demand curve shifts from ad0 to ad1, short run equilibrium output will move initially from point a to point a1.
ad means the initial demand curve and the ad1 is the shifted demand curve.
In the given equation a means the equilibrium point initially and a1 is the equilibrium point to which output has shifted.
A shift in the demand curve occurs when the determinants of demand other than the price changes. It also occurs when the demand for goods and services changes even though the price did not change.
The demand curve shifts to the right if the determinant increases the demand. This means that the demand of the good or service is increasing even though there's no change in price. When there is boom in the economy , buyers' incomes will rise.
They'll buy more of everything, even though there is no change in the price.
The demand curve will shifts to the left if the determinant causes demand to fall. This means that less of the good or service is demanded. That occurs during a recession period when buyers' incomes fall. They will buy less of everything, even though the price is the same.
To know more about demand curve here:
https://brainly.com/question/13131242
#SPJ4
