If the Fed increases the quantity of money,then
A)aggregate demand decreases and the AD curve shifts leftward.
B)aggregate demand increases and the AD curve shifts rightward.
C)the quantity of real GDP demanded decreases and there is a movement up along the AD curve.
D)the quantity of real GDP demanded increases and there is a movement down along the AD curve.
E)both the aggregate demand curve and the aggregate supply curve shift leftward.

Question

Quizplus · Accepted Answer

According to the quantity theory of money, an increase in the quantity of money increases aggregate demand, as there is more money available for spending. As a result, the AD curve shifts rightward.

If the Fed Increases the Quantity of Money,then