For This Question,assume That Investment Spending Depends Only on the Interest

question 35

Multiple Choice

For this question,assume that investment spending depends only on the interest rate and no longer depends on output.Given this information,a reduction in the money supply

• A)will cause investment to decrease.
• B)will cause investment to increase.
• C)may cause investment to increase or to decrease.
• D)will have no effect on output.
• E) will cause a reduction in output and have no effect on the interest rate.