When the Fed Decreases the Money Supply

question 143

Multiple Choice

When the Fed decreases the money supply:

• A)aggregate demand and aggregate supply both increase.
• B)aggregate demand increases,which leads to movement along the short-run aggregate supply curve.
• C)aggregate demand decreases,which leads to movement along the short-run aggregate supply curve.
• D)aggregate supply increases,which leads to movement along the aggregate demand curve.
• E)aggregate supply decreases,which leads to movement along the aggregate demand curve.

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Definitions:

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