Multiple Choice
Suppose the money supply decreases.How is GDP affected?
A) GDP increases because the resulting increase in the interest rate leads to a decrease in investment.
B) GDP increases because the resulting decrease in the interest rate leads to an increase in investment.
C) GDP decreases because the resulting increase in the interest rate leads to a decrease in investment.
D) GDP decreases because the resulting decrease in the interest rate leads to an increase in investment.
Correct Answer:
Verified
Correct Answer:
Verified
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