Holding all else constant,in the short run,a decrease in the money supply can cause a(n)
A) decrease in unemployment.
B) high rate of inflation.
C) increase in the price level.
D) decrease in real gross domestic product (GDP).
E) increase in real gross domestic product (GDP).

Question

Quizplus · Accepted Answer

In the short run, a decrease in the money supply typically leads to higher interest rates, which can reduce investment and consumer spending, leading to a decrease in real GDP.

Holding All Else Constant,in the Short Run,a Decrease in the Money