If the Fed decreases the money supply,gross domestic product:
A) increases by the same amount as the increase in the interest rate.
B) decreases by a greater amount than the increase in the interest rate because of the multiplier.
C) decreases by the same amount as the decrease in investment.
D) decreases by a greater amount than the decrease in investment because of the multiplier.
E) decreases by a lesser amount than the decrease in investment because of the multiplier.
Correct Answer:
Verified
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