AP® Macroeconomics

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Investment and Economic Results

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Suppose an economy is at full employment equilibrium but companies decide to increase investment.

Given the above, which of the following set of data most likely describes the process and results of the added investment in the economy?

A

AD increases, Price level increases, unemployment rises

B

AD increases, price level falls

C

Price levels rise, unemployment increases

D

AD increases, price levels increase and long-run aggregate supply will most likely shift right once investment implemented fully.

E

Taxes rates will decrease, price levels increase and unemployment falls