Refer to the information provided in Figure 12.2 below to answer the questions that follow. Figure 12.2 -Refer to Figure 12.2. Planned investment would experience the least amount of crowding out when the aggregate demand curve shifts from A) AD₁ to AD₂. B) AD₃ to AD₄. C) AD₅ to AD₆. D) The amount of crowding out is the same for all AD curve shifts shown in the figure.

Question

Quizplus · Accepted Answer

Planned investment would experience the least amount of crowding out when the aggregate demand curve shifts from AD1 to AD2 because this shift is the smallest and therefore has the least impact on interest rates.

Refer to the Information Provided in Figure 12