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Exhibit 20-5  Money, Investment and Product Markets in Exhibit 20-5

Question 105

Multiple Choice

Exhibit 20-5  Money, Investment and product markets Exhibit 20-5  Money, Investment and product markets In Exhibit 20-5, if the interest rate falls from i<sub>1</sub> to i<sub>2</sub>, investment spending will: A) increase, and aggregate demand will shift from AD<sub>1</sub> to AD<sub>2</sub>. B) decrease, and aggregate demand will shift from AD<sub>2</sub> to AD<sub>1</sub>. C) remain the same, and aggregate demand will shift from AD<sub>2</sub> to AD<sub>3</sub>. D) increase, and aggregate demand will shift from AD<sub>2</sub> to AD<sub>1</sub>. E) decrease, and aggregate demand will shift from AD<sub>1</sub> to AD<sub>2</sub>. In Exhibit 20-5, if the interest rate falls from i1 to i2, investment spending will:


A) increase, and aggregate demand will shift from AD1 to AD2.
B) decrease, and aggregate demand will shift from AD2 to AD1.
C) remain the same, and aggregate demand will shift from AD2 to AD3.
D) increase, and aggregate demand will shift from AD2 to AD1.
E) decrease, and aggregate demand will shift from AD1 to AD2.

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