What Happens to the Aggregate Demand Curve When the Fed

question 160

Multiple Choice

What happens to the aggregate demand curve when the Fed reduces the money supply?

• A) It shifts leftward, lowering real GDP and the price level.
• B) It shifts leftward, raising real GDP and the price level.
• C) It shifts leftward, lowering real GDP but raising the price level.
• D) It shifts rightward, raising real GDP and the price level.
• E) It shifts rightward, lowering real GDP but raising the price level.

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