Monetarism in the AD-AS framework suggests that a decrease in velocity produces a leftward shift of the AD curve
<h3>What is
AD curve?</h3>
An aggregate demand curve (AD) depicts the relationship between total output demanded (measured in real GDP) and price level (measured as the implicit price deflator).
An aggregate demand curve depicts total domestic spending on goods and services at each price level. An example aggregate demand curve is shown below. The horizontal axis represents real GDP, and the vertical axis represents price level, as in an aggregate supply curve.
As aggregate demand components—consumption spending, investment spending, government spending, and spending on exports minus imports—increase, the aggregate demand curve, or AD curve, shifts to the right. As these components fall, the AD curve will shift back to the left.
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