A. people have insufficient money balanceshave insufficient money balances andâ thus, aggregate demand decreasesdecreases.
b. interest rates increaseincrease causing planned investment to decreasedecreaseâ, which causes a decreasea decrease in aggregate demand.
c. people spend excess money balancesspend excess money balances and thus aggregate demand increasesincreases.
d. interest rates decreasedecreaseâ, causing planned investment to increaseincreaseâ, which causes an increasean increase in aggregate demand.
e. there is no indirect effect of the money supply on the economy.