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Using the Liquidity-Preference Model, When the Federal Reserve Decreases the Money

Question 152

Multiple Choice

Using the liquidity-preference model, when the Federal Reserve decreases the money supply,


A) the equilibrium interest rate increases.
B) the aggregate-demand curve shifts to the right.
C) the quantity of goods and services demanded is unchanged for a given price level.
D) the short-run aggregate-supply curve shifts to the left.

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