In the market for real output, the initial effect of an increase in the money supply is to ?
Correct answer: D. shift the aggregate demand curve to the right
- A. shift the aggregate supply curve to the right
- B. shift the aggregate supply curve to the left
- C. shift the aggregate demand curve to the left
- D. shift the aggregate demand curve to the right
Explanation
An increased money supply lowers interest rates and raises interest-sensitive spending, producing an initial rightward shift of aggregate demand. The question asks about the immediate demand-side effect, not a later supply response.
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