Change in monetary policy
-Refer to Figure 11.3. According to the diagrams a(n) _____________ would _____________ and
_____________ to shift the AD curve ____________.
A) increase in money supply; lower interest rates; increase expenditure; to the right
B) decrease in money supply; raise interest rates; increase expenditure; to the right
C) increase in money supply; lower interest rates; lower expenditure; to the left
D) decrease in money supply; lower interest rates; increase expenditure; to the left

Question

Change in monetary policy
-Refer to Figure 11.3. According to the diagrams a(n) _____________ would _____________ and
_____________ to shift the AD curve ____________.
A) increase in money supply; lower interest rates; increase expenditure; to the right 
B) decrease in money supply; raise interest rates; increase expenditure; to the right 
C) increase in money supply; lower interest rates; lower expenditure; to the left 
D) decrease in money supply; lower interest rates; increase expenditure; to the left

Quizplus · Accepted Answer

An increase in the money supply typically lowers interest rates, which in turn encourages more spending or expenditure. This increased expenditure shifts the Aggregate Demand (AD) curve to the right, reflecting an increase in the overall demand for goods and services in the economy.

Change in Monetary Policy