In a Normal AD-AS Diagram with an Upward-Sloping AS-Curve, If

Multiple Choice

In a normal AD-AS diagram with an upward-sloping AS-curve, if the government wanted to maintain a fixed level of output, it would need to respond to a decrease in money supply by

A) decreasing government expenditures
B) increasing government spending
C) urging the Fed to sell bonds in the open market
D) increasing income taxes
E) decreasing taxes and government spending by the same amount