Question

what are the factors that causes a shift in the aggregate demand curve and why?

Answer 1

The total quantity of goods and services that are demanded by the economy at different price levels is represented by the aggregate demand curve. The factors resulting in the shift of aggregate demand curve are:
1) economy's wealth
It is assumed that the supply of money is held constant by the government. This money represents the wealth of the economy. As price increases, purchasing money decreases resulting in a decline in the economy wealth. i.e. consumers becomes deficient in money and reduces all purchases. On th contrary, the purchasing power increases on the fall of price levels.
2) interest rate effect
As price increases, more spending money is required, but the supply of money remains fixed. As a result, the interest rate increases which causes a decline in purchasing.
3) net exports effect
Demand for imports increases as a result of increase in domestic price levels. Here , foreign products are made cheap. But the scenario evolved will be, the domestic made goods becomes more expensive, which results in a decrease in exports.
The aggregate demand curve can shift either to left or to right. This change is not caused by the price level, but the changes in demands for goods and services, investments, etc.