An increase in autonomous spending is sure to reduce the real money supply when

Name: An increase in autonomous spending is sure to reduce the real money supply when
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Question

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An increase in autonomous spending at full employment is likely to lead to inflationary pressures without a corresponding increase in output. This can reduce the real money supply as the nominal money supply remains constant while the price level increases, reducing the purchasing power of the money supply.

An Increase in Autonomous Spending Is Sure to Reduce the Real