Answer to Question #151766 in Macroeconomics for hirak jyoti boro

Question

Derivation of aggregate demand curve using IS-LM model .

Answer 1

The aggregate demand curve is a locus of points showing alternative combinations of P and Y that are consistent with the general equilibrium of the goods market and money market, i.e., equilibrium r and Y — shown by the intersection of the IS and M curves.

The aggregate demand curve shifts due to any event that shifts the IS curve or the LM curve.