Monetary Policy and Aggregate Demand
All of the following statements about the effect of monetary policy on aggregate demand are true EXCEPT:
A
An expansionary monetary policy that increases the money supply always leads to an increase in interest rates and a leftward shift of the aggregate demand curve.
B
Contractionary monetary policy, which raises interest rates, tends to reduce aggregate demand by curbing investment expenditure.
C
A decrease in interest rates resulting from an expansionary monetary policy can boost investment spending, shifting the aggregate demand curve to the right.
D
Monetary policy influences aggregate demand through its effect on interest rates, which in turn affect consumption, investment, and net exports.
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