Suppose the Bank of Canada Decreases the Money Supply

question 54

Multiple Choice

Suppose the Bank of Canada decreases the money supply.What would be expected to happen to the aggregate demand curve and the aggregate supply curve?  

• A) Aggregate demand would increase, which would lead to movement along the short-run aggregate supply curve. 
• B) Aggregate demand would decrease, which would lead to movement along the short-run aggregate supply curve. 
• C) Aggregate supply would increase, which would lead to movement along the aggregate demand curve. 
• D) Aggregate supply would decrease, which would lead to movement along the aggregate demand curve.

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Definitions:

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A special blanket used in medical settings to reduce a patient's body temperature, often for therapeutic reasons.

Inflammation

A biological response of body tissues to harmful stimuli, such as pathogens, damaged cells, or irritants, characterized by redness, swelling, heat, and sometimes pain and loss of function.

Musculoskeletal System

The organ system that enables humans and animals to move using the muscular and skeletal systems, including bones, muscles, cartilage, tendons, ligaments, and joints.

Blanket

A large piece of soft cloth intended to retain warmth, typically used while sleeping or resting for added comfort and heat.