Suppose that the economy enters a recession and real GDP falls.All else being equal,we would expect:

Name: Suppose that the economy enters a recession and real GDP falls.All else being equal,we would expect:
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During a recession, people tend to reduce their spending and businesses also cut back on investment, thereby leading to a decrease in the overall demand for money. As a result, the money demand curve shifts inward, indicating a lower demand for money at any given interest rate.

Suppose That the Economy Enters a Recession and Real GDP