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Suppose K = 0

Question 25

Multiple Choice

Suppose k = 0.25. With a $10 billion decrease in the money supply, the LM curve shifts


A) to the left by $40 billion.
B) to the left by $4 billion.
C) to the left by $2.5 billion.
D) to the right by $0.25 billion.

Correct Answer:

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