The money supply (M) ,the interest rate (r) ,and aggregate demand (AD) are related such that a(n) :
A) reduction in M reduces r and the reduction in r increases AD
B) reduction in M increases r and the increase in r decreases AD
C) increase in M increases r and the increase in r decreases AD
D) increase in M reduces r and the reduction in r decreases AD
E) increase in M increases r and the increase in r increases AD
Correct Answer:
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