If the Bank of Canada were to reduce the money supply,other things being equal,we would expect the aggregate expenditure curve to shift

Question

Quizplus · Accepted Answer

If the Bank of Canada were to reduce the money supply, it would lead to a decrease in the supply of money available to individuals and firms for spending and investment. This, in turn, would lead to a decrease in aggregate demand since there would be less money available for purchases. As a result, the aggregate expenditure curve would shift downward, and the aggregate demand curve would shift to the left.

If the Bank of Canada Were to Reduce the Money