If the central bank decreases the money supply,then output
A)and unemployment rises.
B)rises and unemployment falls.
C)falls and unemployment rises.
D)and unemployment falls.

Question

Quizplus · Accepted Answer

Decreasing money supply will mean that there is less money available in the economy, making it harder for businesses and individuals to access credit or buy goods and services. This will lead to a decrease in output (as less goods and services will be produced and sold) and an increase in unemployment (as businesses may have to lay off employees due to decreased demand).

If the Central Bank Decreases the Money Supply,then Output