Figure: Aggregate Demand Shifts 3 Refer to the Figure

question 71

Multiple Choice

Figure: Aggregate Demand Shifts 3 Refer to the figure. If the government lowers its spending growth so that the AD curve shifts from AD₁ to AD₂, the multiplier effect will cause the AD curve to:

• A) shift back to AD₁.
• B) remain at AD₂.
• C) shift farther to AD₃.
• D) shift all the way out to AD₄.

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