The various factors that shift the AD curve and the short-run AS curve
Certain events move the entire AD or short-run AS curve left or right. These shifts change the economy's total spending or total output at every price level.
Real World
After Russia invaded Ukraine in 2022, global energy and wheat prices spiked, raising UK firms' production costs and shifting the short-run AS curve to the left — causing stagflation with higher prices and lower output simultaneously.
Exam Focus
For each factor you identify, state the direction of the shift and explain the transmission mechanism — one mark for each step of the chain.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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