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Ceteris Paribus, When the Fed Decreases the Supply of Reserves

Question 40

Multiple Choice

Ceteris paribus, when the Fed decreases the supply of reserves, which of the following happens?


A) There is a movement downward on the supply curve for real money balances.
B) There is a movement upward on the supply curve for real money balances.
C) The supply curve of real money balances shifts to the right.
D) The supply curve of real money balances shifts to the left.

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