AB (15 points) Movement along the AD curve Consider the followingAD curve of an economy. P AD Yd Determine whether each of the following statements is True, or False, or Uncertain. Then provide a brief explanation to justify your answer. 1. The interest rates in both the credit and money markets (ram?it and Rmonw) at point B are higher than those at point D. 2. The level of capital investment (I) made by business firms at point B must be higher than that at point D. 3. The real balance of money held by the public (m) at point B is exactly the same as that at point D. AA (30 points) Shift inAD curve due to extinction of Covid-IQ Suppose the infection rates and death rates associated with Covid-19 have dropped drastically. As a result, there is ISO-degree turn in the sentiments of both consumers and business firms. All of a sudden, they become optimistic about the future of the economy. (a) Explain how such change in condence (or expectations) would affect consumption demand (C) and investment demand (1). (b) Explain how this would create a discrepancy in the interest rates between the loanable-funds market and the money market (i.e., rem\"t vs. money). Then explain how to eliminate such interest- rate gap via EITHER an adjustment in the price level (i.e., Padjustment) OR an adjus1ment in quantity of output demanded (i.e., Yd-adjustment). (c) Conclude how aggregate demand (AD) would respond to such change in sentiments