Refer to the Graph Given Below

Multiple Choice

Refer to the graph given below. Assume that the investment demand curve of an economy is I_d1 in period 1.The crowding-out effect of a large government deficit would be shown as a(n) :

A) shift of the investment demand curve from I_d1 to I_d2.
B) leftward shift of the investment demand curve.
C) increase in the interest rate from 4 percent to 6 percent and a decline in investment spending of $5 billion.
D) increase in the interest rate from 6 percent to 8 percent and a decline in investment spending of $40 billion.