Question: What would be the effect on aggregate demand ( AD ) as a result of a decrease in government purchases and a decrease in investment?

What would be the effect on aggregate demand (AD) as a result of a decrease in government purchases and a decrease in investment?

Question 1 options:

ADwould decrease.

ADwould increase.

ADcould either increase or decrease, depending on which change was of a greater magnitude.

ADwould stay the same.

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