If aggregate demand changes, the equilibrium level of income changes. This can happen in any one or combination of the following situations:

(A) Change in consumption.

(B) Multiplier Effect.

(C) Substitute Effect.

(D) Change in Investment.

Choose the correct answer from the options given below:

Equilibrium income changes only when aggregate demand changes.

A change in consumption means people spend more or less. This directly changes aggregate demand, so income changes.

A change in investment means firms spend more or less on machines, buildings, etc. This also directly changes aggregate demand, so income changes.

The multiplier effect only shows how much income changes after aggregate demand has already changed. It does not itself change aggregate demand.

The substitution effect is about choosing between goods and is not used in NCERT macroeconomics for aggregate demand.

Correct answer: (A) Change in consumption and (D) Change in investment.

Now, NTA unfortunately had the same text in option 1 and option 4, hence, both the options were awarded marks.