In the Keynesian Model in the Short Run,a Decrease in the Money

question 33

Multiple Choice

In the Keynesian model in the short run,a decrease in the money supply will cause

• A)a decrease in output and an increase in the real interest rate.
• B)an increase in the real interest rate but no change in output.
• C)a decrease in the real interest rate and a decrease in output.
• D)no change in either the real interest rate or output.

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Definitions:

Unconditional Promise

A pledge or commitment that does not depend on any conditions or stipulations for its fulfillment.

Pay

The remuneration or salary provided to an individual in exchange for their labor or services.

Cash Substitute

Forms of payment other than traditional cash, such as credit cards, debit cards, or electronic transfers, that are used as alternatives to cash.

Certificate Of Deposit

A financial product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.