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Refer to the Graph Shown

question 14

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Refer to the graph shown.Suppose the government borrows $50 million to finance an increase in its spending and that as a result, the level of investment is reduced by $50 million.In this case, the aggregate demand curve will: Refer to the graph shown.Suppose the government borrows $50 million to finance an increase in its spending and that as a result, the level of investment is reduced by $50 million.In this case, the aggregate demand curve will:   A) shift from AD<sub>0</sub> to AD<sub>2</sub> but then back to AD1. B) shift from AD<sub>0</sub> to AD<sub>2</sub> but then out to AD3. C) shift from AD<sub>0</sub> to AD2. D) not shift.

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