According to the monetarist transmission mechanism,a decrease in the supply of money will result in
A) individuals initially holding excess bonds.
B) individuals initially holding excess money.
C) a leftward shift in the aggregate demand curve.
D) a and c

Question

Quizplus · Accepted Answer

A decrease in the supply of money leads to higher interest rates, reducing investment and consumption, which shifts the aggregate demand curve to the left.

According to the Monetarist Transmission Mechanism,a Decrease in the Supply