Which of the following shifts aggregate demand to the right?
A) a decrease in the money supply
B) The Bank of Canada buys bonds in the open market
C) the repeal of an investment tax credit
D) a decrease in the price level

Question

Quizplus · Accepted Answer

When the Bank of Canada buys bonds in the open market, it increases the money supply in circulation, thus increasing consumer spending and investment. This leads to a rightward shift in aggregate demand. The other options, including a decrease in the money supply, a repeal of an investment tax credit, and a decrease in the price level all lead to a leftward shift in aggregate demand.

Which of the Following Shifts Aggregate Demand to the Right