A downward shift of the Bank of Canada's monetary policy rule corresponds to a _________ the aggregate demand (ADI)curve,and a decrease in autonomous aggregate demand corresponds to a _________ the aggregate demand (ADI)curve.
A) shift to the left of;movement up
B) shift to the left of;shift to the right of
C) movement up;movement down
D) movement up;shift to the right of
E) shift to the right of;shift to the left of

Question

Quizplus · Accepted Answer

A downward shift of the monetary policy rule typically lowers interest rates, increasing aggregate demand and shifting the ADI curve to the right. A decrease in autonomous aggregate demand shifts the ADI curve to the left.

A Downward Shift of the Bank of Canada's Monetary Policy