Which of the following will cause a decrease in aggregate demand?
A) Restrictive monetary policy.
B) A decrease in the reserve requirement.
C) Expansionary monetary policy.
D) The purchase of bonds by the Fed.

Question

Quizplus · Accepted Answer

Restrictive monetary policy, such as increasing interest rates or selling government securities, tends to decrease aggregate demand by making borrowing more expensive and reducing spending.

Which of the Following Will Cause a Decrease in Aggregate