An increase in the money supply
A)and an investment tax credit both cause aggregate demand to shift right.
B)and an investment tax credit both cause aggregate demand to shift left.
C)causes aggregate demand to shift right,while an investment tax credit causes aggregate demand to shift left.
D)causes aggregate demand to shift left,while an investment tax credit causes aggregate demand to shift right.

Question

Quizplus · Accepted Answer

An increase in the money supply will increase the amount of money in circulation, leading to increased consumer and business spending, and therefore, aggregate demand. An investment tax credit will increase the incentives for businesses to invest and expand their operations, leading to increased production and aggregate demand. Both policies will work together to shift aggregate demand to the right.

An Increase in the Money Supply