Choice "C" is correct. A decline in interest rates would cause the aggregate demand curve to shift right, which increases real GDP. Similarly, a decline in input costs would cause the aggregate supply curve to shift right, which also increases real GDP.
Choice "a" is incorrect. Both of these events would cause real GDP to decline.
Choice "b" is incorrect. A rise in interest rates would cause real GDP to decline, not increase.
Choice "d" is incorrect. A decline in government spending would cause real GDP to decline, not increase.
