The Ultimate Effect of a Reduction in the Money Supply

question 127

Multiple Choice

The ultimate effect of a reduction in the money supply is:

• A)a leftward shift of the aggregate demand curve.
• B)a rightward shift of the short-run aggregate supply curve.
• C)a movement upward along the aggregate demand curve.
• D)a movement downward along the aggregate demand curve.
• E)a movement upward along the short-run aggregate supply curve.

---

Definitions:

Preferences

An indication of the comparative liking, desires, or tastes of consumers for one good or service over another.

Parallel

In mathematics and computing, it refers to lines that remain the same distance apart and never meet, or processes occurring simultaneously.

Transitive Preferences

A condition in decision-making where if an individual prefers option A over B, and B over C, then they must also prefer A over C.

Characteristics

Distinctive features or qualities that define a person, object, or phenomenon.