Suppose Investment Spending Falls

question 65

Multiple Choice

Suppose investment spending falls.To offset the change in output the Federal Reserve could

• A)increase the money supply.This increase would also move the price level closer to its value before the decline in investment spending.
• B)increase the money supply.However,this increase would move the price level farther from its value before the decline in investment spending.
• C)decrease the money supply.This decrease would also move the price level closer to its value before the decline in investment spending.
• D)decrease the money supply.However,this increase would move the price level farther from its value before the decline in investment spending.

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Definitions:

Property Rights

Legal rights over the use, control, and transfer of property, which can include intellectual property, real estate, and physical assets.

Political Rights

The rights of citizens to participate in the political process, including the right to vote, join political parties, and hold public office.

Suffrage Rights

The right to vote in public elections.

Riparian Rights

Legal rights of property owners to use and access water from a river, stream, or other body flowing through or adjacent to their land.