Multiple Choice
If the economy is operating in the relatively steep (upper) portion of its aggregate supply curve, a reduction in the money supply will
A) increase the interest rate and increase employment.
B) reduce the interest rate and increase employment.
C) increase the interest rate and reduce the price level, assuming it is flexible downward.
D) reduce the interest rate and increase the price level.
Correct Answer:
Verified
Correct Answer:
Verified
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