Chapter 23 output and prices in the short run notes. N ae curve shifts in response to a change in price level. N when the ae curve shifts downward, the equilibrium level of real gdp falls. Ad curve, reflecting a fall in the equilibrium level of gdp a fall in the price level causes the ae curve to shift upward and hence leads to a movement downward and to the right along the. N only at the combination of real gdp and price level given by the intersection of the as and ad curves are demand behaviour and supply behaviour consistent. N aggregate demand and supply shocks are labelled according to their effect on real gdp; positive shocks increase equilibrium. N aggregate demand shocks cause the price level and real gdp to change in the same direction; both rise with an increase in aggregate demand, and both fall with a decrease in aggregate demand.