Holding all else constant,in the short run,a decrease in the money supply can cause:
A) a decrease in unemployment.
B) a high rate of inflation.
C) an increase in the price level.
D) a decrease in real gross domestic product (GDP).
E) an increase in real GDP.

Question

Quizplus · Accepted Answer

In the short run, a decrease in the money supply typically leads to higher interest rates, which can reduce investment and consumer spending, leading to a decrease in real GDP.

Holding All Else Constant,in the Short Run,a Decrease in the Money