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Ceteris Paribus, Which of the Following Would Cause the Aggregate

question 4

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Ceteris paribus, which of the following would cause the aggregate demand curve to shift to the left?


Definitions:

Excess Reserves

Funds that banks hold over and above the legal requirement set by the central bank or banking regulator.

New Reserves

Additional funds or assets that financial institutions or countries set aside to meet future liabilities or unforeseen needs.

Excess Reserves

The amount of reserves that banks hold over the minimum required by the central bank to back deposits.

Money Creation

The process by which the money supply of a country is increased through the activities of its central bank and commercial banking system.

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