A negative demand shock, holding everything else constant:.
A negative demand shock, holding everything else constant, has the following effects:
a. It moves the economy downward along the Aggregate Demand (AD) curve.
b. It moves the economy upward along the AD curve.
c. It shifts the AD curve to the left, resulting in lower aggregate price levels and lower real GDP in the short run.
d. It shifts the Aggregate Supply (AS) curve to the left, leading to lower aggregate price levels and lower real GDP in the short run.
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