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

question 113

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.

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