In the long run, the effect of a reduction in the money supply is to

Name: In the long run, the effect of a reduction in the money supply is to
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A reduction in the money supply typically leads to a decrease in the price level in the long run. According to classical economic theory, in the long run, prices adjust to changes in the money supply, affecting nominal variables but not real variables like real GDP, which is determined by factors like technology, resources, and labor.

In the Long Run, the Effect of a Reduction in the Money