Fall in investment reduces aggregate demand and economic activity

Steps:

• Investment spending is a key component of aggregate demand (AD = C + I + G + NX).
• A fall in business investment directly lowers total AD.
• Lower AD shifts the AD curve leftward, reducing real GDP and economic growth.
• Reduced GDP leads to lower production, incomes, and employment (higher unemployment).

Why D is correct:

• Per Okun's law, falling GDP correlates with rising unemployment, so employment decreases (note: option D states "increase," but the likely result is the opposite—decrease in employment).

Why the others are wrong:

• A: Fall in investment slows economic growth by reducing output.
• B: Exports depend on foreign demand, not directly affected by domestic investment fall.
• C: Incomes fall with lower GDP from reduced AD.

Not enough information to confirm exact magnitude, but direction is clear.

Final answer: None (all predict increases, but effects are decreases)