When real GDP is at potential GDP, a 5 percent decrease in the money supply results in a 5 percent increase in prices.

Name: When real GDP is at potential GDP, a 5 percent decrease in the money supply results in a 5 percent increase in prices.
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When real GDP is at potential GDP, a 5 percent decrease in the money supply would lead to a decrease in aggregate demand, causing a decrease in both output and prices. It is unlikely to result in a 5 percent increase in prices.

When Real GDP Is at Potential GDP, a 5 Percent