Which of the following will occur if the Fed raises the reserve requirement,ceteris paribus?
A) The aggregate supply curve should shift leftward.
B) The aggregate supply curve should shift rightward.
C) The aggregate demand curve should shift leftward.
D) The aggregate demand curve should shift rightward.

Question

Quizplus · Accepted Answer

When the Federal Reserve raises the reserve requirement, banks have less money to lend, which can lead to higher interest rates. This decrease in lending and increase in interest rates can reduce spending and investment, leading to a leftward shift in the aggregate demand curve.

Which of the Following Will Occur If the Fed Raises