Which of the following best describes how an increase in the money supply shift the aggregate demand curve?
AThe money supply shifts right, prices rise, demand curve shifts left
BThe money supply shifts right the interest rate rises investment decreases and the aggregate demand curve shifts left
CThe money supply shifts right prices fall spending increases and the aggregate demand curve shifts right
DThe money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
Correct answer
D. The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
Explanation
The correct answer is The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right.