When the Fed Decreases the Money Supply, _____

question 170

Multiple Choice

When the Fed decreases the money supply, _____

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