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In the Above Figure the Economy Is Initially at Point

Question 393

Multiple Choice

In the above figure the economy is initially at point A on aggregate expenditure curve AE0. Suppose investment decreases. As a result


A) there is a movement along AE1 to a point such as B.
B) the AE curve shifts upward to a curve such as AE2.
C) there is a movement along AE1 to a point such as C.
D) the AE curve shifts downward to a curve such as AE1.

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