If the Fed buys more bonds from the public,then the money supply will:
A) Decrease and the aggregate demand curve will shift to the right.
B) Increase and the aggregate demand curve will shift to the right.
C) Increase and the aggregate demand curve will shift to the left.
D) Decrease and the aggregate demand curve will shift to the left.

Question

Quizplus · Accepted Answer

When the Fed buys bonds from the public, it injects money into the economy, increasing the money supply. This increases the purchasing power of consumers and businesses, which leads to an increase in aggregate demand. Therefore, the aggregate demand curve shifts to the right.

If the Fed Buys More Bonds from the Public,then the Money