(Figure: the Multiplier) Refer to Figure: the Multiplier

Question 38
Multiple Choice

(Figure: The Multiplier) Refer to Figure: The Multiplier. If this economy is at Y1 and investment spending increases: A) AD1 will shift to the left, reflecting a multiplied decrease in real GDP at every price level. B) AD1 will shift to the right, reflecting a multiplied increase in real GDP at every price level. C) an upward movement along the AD1 will take place, reflecting an increase in the price level. D) a downward movement along the AD1 will take place, reflecting a decrease in the price level.