All Other Things Unchanged, Why Does an Increase in Money

question 157

Multiple Choice

All other things unchanged, why does an increase in money demand cause the aggregate demand curve will shift to the left?

• A) Because the resulting increase in bond prices reduces consumption spending.
• B) Because the resulting decrease in bond interest rate will lead to an increase in the quantity of investment and net exports.
• C) Because the resulting higher interest rate will lead to a lower quantity of investment and net exports.
• D) Because the resulting lower interest rate will lead to lower net exports.

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