more on the AD curve

Dear Penners -- Thanks for your responses to my AD query. I'm still a bit confused though. Two questions: Why do we assume that an increase in A PRICE (supply shock like OPEC) implies an increase in the PRICE LEVEL? If the AD curve is drawn on the basis of hypothetic

more on the AD curve

Dear Penners -- Thanks for your responses to my AD query. I'm still a bit confused though. Two questions: Why do we assume that an increase in A PRICE (supply shock like OPEC) implies an increase in the PRICE LEVEL? If the AD curve is drawn on the basis of hypothetic