2.1 Changes in which factors could cause aggregate demand to shift from AD to AD1? What could happen to the unemployment rate? What could happen to the inflation rate?

There are many factors that cause aggregate demand to shift from AD to AD1. The unemployment rate will fall and inflation will increase.

Explanation:

A Shift in aggregate demand from AD to AD1 means there has been a  fall in demand. Various factors that cause demand to decrease are:

So due to the decrease in demand finally the unemployment will increase and with that, the inflation rate will increase making  things dearer.

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