-Refer to the Above Figure

-Refer to the above figure. The government has just engaged in expansionary fiscal policy shifting the aggregate demand curve from AD₁ to AD₂. Interest rates have started to rise. Which of the following statements is TRUE in the short run?

A) Real GDP will be $14 trillion since the effect of government spending is not influenced by interest rates.
B) Real GDP will fall back to $11 trillion since the effect that increased government spending has on real GDP is short lived.
C) Real GDP will go beyond $14 trillion as businesses and consumers react to the increase in interest rates.
D) Real GDP will end up somewhere between $11 and $14 trillion as businesses and consumers reduce their spending in response to the increase in interest rates.