Contractionary monetary policy:

a.

lowers interest rates, causing aggregate demand to shift to the left.

b.

lowers interest rates, causing aggregate demand to shift to the right.

c.

raises interest rates, causing aggregate demand to shift to the left.

d.

raises interest rates, causing aggregate demand to shift to the right.

e.

lowers interest rates, causing short-run aggregate supply to shift to the right.

Question

Contractionary monetary policy:



 
a.

lowers interest rates, causing aggregate demand to shift to the left.



 
b.

lowers interest rates, causing aggregate demand to shift to the right.



 
c.

raises interest rates, causing aggregate demand to shift to the left.



 
d.

raises interest rates, causing aggregate demand to shift to the right.



 
e.

lowers interest rates, causing short-run aggregate supply to shift to the right.

Unlock all answers

Related textbook solutions

Principles of Economics

Principles of Macroeconomics

Principles of Microeconomics

Weekly leaderboard

	a.	lowers interest rates, causing aggregate demand to shift to the left.
	b.	lowers interest rates, causing aggregate demand to shift to the right.
	c.	raises interest rates, causing aggregate demand to shift to the left.
	d.	raises interest rates, causing aggregate demand to shift to the right.
	e.	lowers interest rates, causing short-run aggregate supply to shift to the right.