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    aggregate demand curve

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    Describe how the following events change the aggregate demand curve:
    a. a decrease in money demand caused by the introduction of a new electronic money card
    b. a decrease in the money supply
    c. an increase in the price level
    d. an increase in government taxes

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    Solution Preview

    a. a decrease in money demand caused by the introduction of a new electronic money card
    The introduction of a new electronic money card will not change the M1 supply and, therefore, the money demand is reduced.

    This will put a downward pressure on interest rate and discourage savings. So more money will be ...

    Solution Summary

    This job shows how aggregate demand curves shift.

    $2.19