Use the following to answer questions: -(Figure: Shift of the Aggregate Demand Curve)Refer to Figure: Shift of the Aggregate Demand Curve.A movement from point C on AD₂ to point A on AD₁ may have been the result of: A) an increase in investment spending following optimistic GDP forecasts. B) a decrease in investment spending following pessimistic GDP forecasts. C) decreases in the taxes paid by businesses. D) lower interest rates.

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A movement from point C on AD₂ to point A on AD₁ represents a decrease in aggregate demand, which could be caused by a decrease in investment spending following pessimistic GDP forecasts. The other options (an increase in investment spending, decreases in taxes, and lower interest rates) would all cause an increase in aggregate demand, causing a shift to the right rather than a shift to the left.

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