for a given level of inflation, if there is a change in the economy that reduces equilibrium output, what happens to AD

### AD shifts to the left

## Step1: Understanding the Concepts of Inflation and Aggregate Demand (AD)### Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Aggregate Demand (AD) is the total demand for final goods and services in an economy at a given time. It is the sum of consumption, investment, government spending, and net exports.## Step2: Understanding the Relationship between Equilibrium Output and AD### Equilibrium output is the level of output where aggregate demand equals aggregate supply. If there is a change in the economy that reduces equilibrium output, it implies that the aggregate demand is less than the aggregate supply at the current price level.## Step3: Analyzing the Effect on AD### When equilibrium output decreases, it means that the quantity of goods and services demanded at the current price level is less than the quantity supplied. This causes a surplus in the market, which leads to a decrease in the price level. As the price level decreases, the aggregate demand shifts to the left because at lower price levels, the quantity of goods and services demanded is less.