If the quantity of money increases, the
A) price level rises and the AD curve does not shift.
B) AD curve does not shift and there is a movement upward along the curve.
C) AD curve shifts leftward and aggregate demand decreases.
D) AD curve shifts rightward and aggregate demand increases.

Question

Quizplus · Accepted Answer

An increase in the quantity of money shifts the AD curve to the right, meaning that aggregate demand increases. This is because more money in circulation means people have more purchasing power, leading to increased spending and demand for goods and services.

If the Quantity of Money Increases, the