Which statement is true?

A) Only monetary policy can affect aggregate demand.
B) Only fiscal policy can affect aggregate demand.
C) Both monetary and fiscal policy can affect aggregate demand.
D) Neither monetary nor fiscal policy can affect aggregate demand.

Aggregate Demand

The overall request for every good and service within an economic system at varying prices over a particular timeframe.

Monetary Policy

Actions of a central bank, currency board, or other regulatory authorities that determine the size and rate of growth of the money supply, which in turn affects interest rates.

Fiscal Policy

Government policies regarding taxation and spending that influence economic conditions.