biology

When an aggregate demand curve is drawn with real gross domestic product (GDP) (Y) along the horizontal axis and the price level (P) along the vertical axis, if the money supply is decreased, then the aggregate demand curve will shift:

downward and to the left.

When the Federal Reserve reduces the money supply, at a given price level the amount of output demanded is _____, and the aggregate demand curve shifts _____.

lower; inward

The aggregate demand curve is the _____ relationship between the quantity of output demanded and the _____.

negative; price level

Assuming velocity is constant, the aggregate demand curve tells us possible:

combinations of P and Y for a given value of M.

If a change in government regulations allows banks to start paying interest on checking accounts, this will:

increase the demand for money.