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Refer to Figure 10

Question 32

Multiple Choice

  Refer to Figure 10.3.If autonomous investment spending drops by enough to shift the aggregate demand curve from AD<sub>1</sub> to AD<sub>2</sub>,the multiplier effect is likely to A) Create a second induced shift from AD<sub>2</sub> to AD<sub>3</sub>. B) Create a second induced shift from AD<sub>2</sub> to AD<sub>0.</sub> C) Have no effect on the AD curve. D) Create a second induced shift from AD<sub>2</sub> back to AD<sub>1</sub>. Refer to Figure 10.3.If autonomous investment spending drops by enough to shift the aggregate demand curve from AD1 to AD2,the multiplier effect is likely to


A) Create a second induced shift from AD2 to AD3.
B) Create a second induced shift from AD2 to AD0.
C) Have no effect on the AD curve.
D) Create a second induced shift from AD2 back to AD1.

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