Demand Shocks A demand shock shifts the aggregate demand curve, moving the aggregate price level and aggregate output in the same direction. In panel (a), a negative demand shock shifts the aggregate demand curve leftward from AD₁ to AD₂, reducing the aggregate price level from P₁ to P₂ and aggregate output from Y₁ to Y₂. In panel (b), a positive demand shock shifts the aggregate demand curve rightward, increasing the aggregate price level from P₁ to P₂ and aggregate output from Y₁ to Y₂.