Question

A decrease in the money supply will shift the aggregate __________ curve to the __________.

Answer 1

Answer:

demand,left

Explanation:

Answer 2

Hi there!

A decrease in the money supply will shift the aggregate DEMAND curve to the LEFT.

Decreasing the money supply is an example of contractionary monetary policy. This results in an increase in the nominal interest rate, which causes a decrease in Aggregate Demand (Primarily Investment Spending, Gov Spending, and Interest-sensitive consumer spending).

A decrease in Aggregate Demand results in a Shift LEFT of the Aggregate Demand curve.