A decrease in the money supply will shift the aggregate __________ curve to the __________.
A) supply; left
B) supply; right
C) demand; left
D) demand; right

Question

Quizplus · Accepted Answer

A decrease in the money supply typically leads to higher interest rates, which in turn reduces investment and spending. This results in a leftward shift of the aggregate demand curve, as there is less overall demand in the economy.

A Decrease in the Money Supply Will Shift the Aggregate