If Investment Decreases, the AE Curve Shifts

question 423

Multiple Choice

If investment decreases, the AE curve shifts

• A) upward and the AD curve shifts rightward.
• B) downward and the AD curve shifts leftward.
• C) upward and there is a movement along the AD curve.
• D) downward and there is a movement along the AD curve.

---

Definitions:

Real Estate Project

An initiative involving the purchase, improvement, management, or sale of property assets for the purpose of generating profits or revenue.

Risk-Free Asset

An investment that is expected to return its original value without any loss, theoretically free from default risk.

MRS

Marginal Rate of Substitution, the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can purchase with a given budget at fixed prices.