Exhibit 10-7 -Refer to Exhibit 10-7. If Investment Decreases,which of the Following

Multiple Choice

Exhibit 10-7

-Refer to Exhibit 10-7. If investment decreases,which of the following is possible?

A) The AD curve shifts leftward from AD₂ to AD₁, the price level falls, and Real GDP remains constant.
B) The AD curve shifts leftward from AD₄ to AD₃, the price level falls, and Real GDP remains constant.
C) The AD curve shifts rightward from AD₁ to AD₂, the price level remains constant, and Real GDP rises.
D) The AD curve shifts rightward from AD₃ to AD₄, the price level rises, and Real GDP remains constant.
E) c and d