If the Fed Decreases the Money Supply,causing the Interest Rate

question 129

Multiple Choice

If the Fed decreases the money supply,causing the interest rate to rise,GDP

• A)increases by the same amount as the increase in the interest rate
• B)decreases by more than the increase in the interest rate because of the multiplier
• C)decreases by the same amount as the decrease in investment
• D)decreases by more than the decrease in investment because of the multiplier
• E)decreases by less than the decrease in investment because of the multiplier

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