If the Bank of Canada increases the quantity of money in circulation,interest rates _____,investment spending _____,and the aggregate demand curve shifts to the _____.
A) decrease;increases;right
B) increase;increases;right
C) decrease;increases;left
D) increase;decreases;left

Question

Quizplus · Accepted Answer

When the Bank of Canada increases the money supply, interest rates typically decrease, which encourages more investment spending. This increase in investment spending shifts the aggregate demand curve to the right.

If the Bank of Canada Increases the Quantity of Money