When the Bank of Canada increases the money supply, at the previous equilibrium interest rate households and firms will now have

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When the money supply is increased, households and firms will now have more money than they want to hold as they will have more cash on hand than they require for their day-to-day transactions. This will result in a decrease in interest rates and an increase in aggregate demand as households and firms will be incentivized to spend the excess money.

When the Bank of Canada Increases the Money Supply, at the Previous