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:

(A), and (D) only

The correct answer is Option (1) → (A), and (D) only 

(A) Change in Consumption: Consumption is a major component of aggregate demand. When people decide to spend more (for example, due to higher income or optimism about the future), aggregate demand increases. As a result, producers expand output, and the equilibrium level of income rises. Similarly, if consumption falls, aggregate demand and equilibrium income fall.

(B) Multiplier Effect: The multiplier effect explains how an initial change in investment or spending leads to a greater overall change in income, but it is not itself a cause of change in equilibrium income. Instead, it shows how much the income will change once consumption or investment changes. Hence, it amplifies the change but does not independently cause it.

(C) Substitute Effect: The substitute effect refers to how consumers change their demand for a good when its price changes relative to another good. This concept belongs to microeconomics and individual consumer behavior, not to aggregate demand in the economy. Therefore, it does not affect equilibrium income at the macro level.

(D) Change in Investment: Investment by firms is key part of aggregate demand. When investment increases—such as when interest rates fall or business expectations improve—aggregate demand rises, causing output and equilibrium income to increase. If investment falls, the opposite happens.