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Suppose the Fed Reduces the Money Supply in the Current

Question 41

Multiple Choice

Suppose the Fed reduces the money supply in the current period with no other policy change implemented or anticipated.This policy action will cause which of the following shifts in the IS and / or LM curves in the current period?


A) IS left; LM up
B) IS right; LM up
C) no shift in IS; LM up
D) IS left; LM down
E) IS right; LM down

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