Figure 9.1 -Refer to Figure 9.1. a Reduction in Government Spending Causes

Multiple Choice

Figure 9.1
-Refer to Figure 9.1. A reduction in government spending causes:

A) the aggregate demand curve to shift from AD₁ to AD₂.
B) the economy to move from Point A to Point B, but will not shift the aggregate demand curve.
C) the aggregate demand curve to shift from AD₁ to AD₀.
D) neither a shift of the aggregate demand curve nor a change in real GDP.