Which of the following situations illustrates how monetary policy can influence aggregate demand?
Select one:
a. The government reduces the goods and services tax. If household consumption expenditure increases, aggregate demand increases.
b. The Bank of Canada raises interest rates. If people plan to buy fewer consumer durables, aggregate demand decreases.
c. Government increases its expenditure on goods and services. If private investment decreases, aggregate demand might not change.
d. The Canadian dollar exchange rate rises. If Canadian living near the U.S.-Canada border increase their imports of goods, aggregate demand decreases.
e. The expected future profit increases. If investors decide to save more, aggregate demand decreases.
