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Suppose the Bank of Canada Decreases the Money Supply

Question 54

Multiple Choice

Suppose the Bank of Canada decreases the money supply.What would be expected to happen to the aggregate demand curve and the aggregate supply curve?  


A)  Aggregate demand would increase, which would lead to movement along the short-run aggregate supply curve. 
B)  Aggregate demand would decrease, which would lead to movement along the short-run aggregate supply curve. 
C)  Aggregate supply would increase, which would lead to movement along the aggregate demand curve. 
D)  Aggregate supply would decrease, which would lead to movement along the aggregate demand curve.

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