The Figure Below Depicts the Three Possible Aggregate Demand Curves

question 19

Multiple Choice

The figure below depicts the three possible aggregate demand curves. If the Bank of Canada (the Canadian central bank) ____________, the Canadian dollar will depreciate and the aggregate demand curve will shift from AD₂ to ____________.

• A) devalues the Canadian dollar; AD₁
• B) prints more Canadian dollars; AD₁
• C) decreases the supply of Canadian dollars; AD₃
• D) increases the supply of Canadian dollars; AD₃
• E) prints less Canadian dollars; AD₃

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