A decrease in the interest rate by the Bank of Canada based on a given monetary policy rule represents a ________ the aggregate demand (ADI)curve,but decrease in the interest rate resulting from a downward shift in the Bank of Canada's monetary policy rule represents a _________ the aggregate demand (ADI)curve.
A) shift to the left of;movement up
B) shift to the left of;shift to the right of
C) movement up;movement down
D) movement up;shift to the left of
E) movement down;shift to the right of

Question

Quizplus · Accepted Answer

A decrease in the interest rate by the Bank of Canada based on a given monetary policy rule represents a movement down the ADI curve, while a decrease in the interest rate resulting from a downward shift in the Bank of Canada's monetary policy rule represents a shift to the right of the ADI curve.

A Decrease in the Interest Rate by the Bank of Canada