Suppose that the money supply in Canada increases. We can expect, other things remaining constant,:

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Quizplus · Accepted Answer

When the money supply in Canada increases, interest rates typically fall because there is more money available for lending. This decrease in interest rates makes borrowing cheaper, encouraging spending and investment. Consequently, the aggregate expenditure function, which represents the total spending in the economy at different levels of income, shifts upward due to increased consumption and investment.

Suppose That the Money Supply in Canada Increases