Exhibit 20-1  Money Market Demand and Supply Curves as Shown

question 106

Multiple Choice

Exhibit 20-1  Money market demand and supply curves As shown in Exhibit 20-1, assume the money supply curve shifts leftward from MS₁ to MS₂ and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:

• A) higher investment, lower real GDP, and lower price level.
• B) lower investment, lower real GDP, and lower price level.
• C) higher investment, higher real GDP, and higher price level.
• D) higher interest rate and no effect on real GDP or the price level.

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