A monetary stimulus is designed to shift the
A)AS curve to the right.
B)AS curve to the left.
C)AD curve to the right.
D)AD curve to the left.

Question

Quizplus · Accepted Answer

A monetary stimulus, such as an increase in the money supply or a decrease in interest rates, aims to increase spending and stimulate economic growth. This is achieved by shifting the AD curve to the right, as the increase in money supply or decrease in interest rates leads to an increase in consumption, investment and net exports. Therefore, the correct answer is C, AD curve to the right.

A Monetary Stimulus Is Designed to Shift the