A restrictive monetary policy is designed to shift the
A) aggregate demand curve rightward.
B) aggregate demand curve leftward.
C) aggregate supply curve rightward.
D) aggregate supply curve leftward.

Question

Quizplus · Accepted Answer

A restrictive monetary policy is aimed at decreasing the money supply, which leads to higher interest rates, decreases in private investment and consumption, and ultimately a leftward shift in the aggregate demand curve.

A Restrictive Monetary Policy Is Designed to Shift the