When the Bank of Canada increases the money supply,why will it cause an increase in aggregate demand?
A) because the dollar will appreciate on the foreign exchange market, leading to an increase in net exports
B) because interest rates will fall, stimulating business investment and consumer purchases
C) because consumers will expect prices to rise and will increase current consumption
D) because lower interest rates will tend to decrease asset prices, which increases wealth and thereby stimulates current consumption
Correct Answer:
Verified
Q8: What does the money demand curve illustrate?
A)the
Q9: Why is the money supply curve almost
Q10: What effect would lowering the bank rate,other
Q11: How would an economist describe the supply
Q12: If a reduction in the money supply
Q14: What does the quantity of money demanded
Q15: What will the combination of an increase
Q16: If money supply and money demand both
Q17: What effect will contractionary monetary policy tend
Q18: If money supply and money demand both
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