A reduction in the money supply should shift the aggregate:
A) Supply curve to the left.
B) Supply curve to the right.
C) Demand curve to the left.
D) Demand curve to the right.

Question

Quizplus · Accepted Answer

A reduction in the money supply typically leads to higher interest rates, which decreases investment and spending. This results in a shift of the aggregate demand curve to the left.

A Reduction in the Money Supply Should Shift the Aggregate