Assuming the aggregate supply curve is upward-sloping,which of the following is most likely to occur if the Fed pursues restrictive monetary policy?

Question

Quizplus · Accepted Answer

Restrictive monetary policy typically leads to higher interest rates, which reduce investment and spending. This decrease in demand shifts the aggregate demand curve to the left, leading to a lower equilibrium price level and output in the context of an upward-sloping aggregate supply curve.

Assuming the Aggregate Supply Curve Is Upward-Sloping,which of the Following