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If the Fed Decreases the Money Supply

Question 184

Multiple Choice

If the Fed decreases the money supply,


A) aggregate demand and aggregate supply both increase.
B) aggregate demand increases, which leads to movement along the short-run aggregate supply curve.
C) aggregate demand decreases, which leads to movement along the short-run aggregate supply curve.
D) aggregate supply increases, which leads to movement along the aggregate demand curve.
E) aggregate supply decreases, which leads to movement along the aggregate demand curve.

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