In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in money supply shifts the____ curve to the _____.
A)aggregate demand; right
B)aggregate demand; left
C)aggregate supply; right
D)aggregate supply; left

Question

Quizplus · Accepted Answer

An increase in money supply increases the purchasing power of consumers, resulting in higher consumption and investment spending. This leads to an increase in demand for goods and services, shifting the aggregate demand curve to the right.

In the Aggregate Demand-Aggregate Supply Model, Everything Else Remaining Unchanged