Starting from a Position of Macroeconomic Equilibrium at the Full-Employment

Multiple Choice

Starting from a position of macroeconomic equilibrium at the full-employment level of real GDP, in the short run, an unanticipated decrease in the money supply will:

A) raise real interest rates, lower the price level, and reduce real GDP.
B) raise real interest rates, lower the price level, and increase real GDP.
C) raise nominal interest rates, raise the price level, and leave real GDP unchanged.
D) lower real interest rates, raise the price level, and increase real GDP.
E) lower real interest rate, lower the price level, and increase real GDP.