If businesses become very pessimistic and reduce spending,which of the following is the most likely in the short run?
A) An increase in output,an increase in money demand and an increase in the interest rate.
B) A decrease in output,an increase in money demand and an increase in the interest rate.
C) A decrease in output,a decrease in money demand and a decrease in the interest rate.
D) An increase in output,a decrease in money demand and a decrease in the interest rate.
E) A decrease in output,a decrease in money demand and an increase in the interest rate.
Correct Answer:
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