Use the following to answer questions:
-To fight inflation,the Bank of Canada should conduct _____ monetary policy to _____ interest rates,which will shift the aggregate demand curve to the _____.

Question

Use the following to answer questions: 
-To fight inflation,the Bank of Canada should conduct _____ monetary policy to _____ interest rates,which will shift the aggregate demand curve to the _____.

Quizplus · Accepted Answer

Contractionary monetary policy involves raising interest rates, which will lead to a decrease in borrowing and spending, hence shifting the aggregate demand curve to the left. This helps to combat inflationary pressures by reducing overall demand in the economy.

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