If the interest rate increases through monetary policy, the:
A) aggregate demand curve shifts to the right
B) aggregate demand curve shifts to the left
C) aggregate supply curve shifts to the right
D) aggregate supply curve shifts to the left

Question

Quizplus · Accepted Answer

Increasing interest rates through monetary policy reduces consumer and investment spending, leading to a decrease in aggregate demand. This causes the aggregate demand curve to shift to the left.

If the Interest Rate Increases Through Monetary Policy, The