A decrease in the money supply must cause which of the following?
A) An increase in the interest rate and ambiguous effects on investment.
B) A downward shift in the LM curve.
C) A decrease in investment and a leftward shift in the IS curve.
D) No change in output if investment is independent of the interest rate.
E) No change in the interest rate if investment is independent of the interest rate.
Correct Answer:
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