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Figure: Aggregate Demand Shifts 3 Refer to the Figure

Question 41

Multiple Choice

Figure: Aggregate Demand Shifts 3 Figure: Aggregate Demand Shifts 3 Refer to the figure.If the government lowers its spending growth so that the AD curve shifts from AD<sub>1</sub> to AD<sub>2</sub>,the multiplier effect will cause the AD curve to: A) shift back to AD<sub>1</sub>. B) remain at AD<sub>2</sub>. C) shift farther to AD<sub>3</sub>. D) shift all the way out to AD<sub>4</sub>. 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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