Which of the Following Best Describes the Cause-Effect Chain of a Restrictive

question 30

Multiple Choice

Which of the following best describes the cause-effect chain of a restrictive monetary policy?

• A)A decrease in the money supply will lower the interest rate, increase investment spending, and increase GDP.
• B)A decrease in the money supply will raise the interest rate, decrease investment spending, and decrease GDP.
• C)An increase in the money supply will raise the interest rate, decrease investment spending, and decrease GDP.
• D)An increase in the money supply will lower the interest rate, decrease investment spending, and increase GDP.

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Definitions:

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