The change in the price level which cause a decrease in interest rates would results to increase in quantity of real output demanded (or movement down along AD).
A change in aggregate output due to change in price causes a movement along Aggregate demand (AD) curve.
Investment is inversely related to interest rate, therefore, the decrease in interest rate will result in increase in quantity of real output demanded
Also, when the interest rate increases it is possible that there is decrease in price level which shift real money supply curve to the right and hence interest rate decreases.
Therefore, the Option D. is correct because of the increase in real output and decrease in price level leads to downward movement along AD curve.
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