Identify the Correct Statement About Changes in Money Supply

question 31

Multiple Choice

Identify the correct statement about changes in money supply.

• A)A decrease in money supply causes interest rates to fall.
• B)A decrease in money supply causes investment spending to increase.
• C)A decrease in money supply causes gross domestic product to increase.
• D)A decrease in money supply causes investment spending to decrease.
• E)A decrease in money supply causes aggregate expenditure to increase.

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Definitions:

Year-End

The end of a fiscal or calendar year, often used to reference the closing of financial accounts.

Taxes

Mandatory financial charges or levies imposed by a government on individuals, entities, or transactions to fund government spending and various public expenditures.

Futures Position

An investment strategy involving contracts for the purchase or sale of assets at a future date at a price specified today.

Closed Out

The process of finalizing all positions in a security or contract, effectively ending all obligations or engagements in those positions.