Asked by Taylor Marler on Jul 03, 2024
Verified
The ultimate effect of a reduction in the money supply is:
A) a leftward shift of the aggregate demand curve.
B) a rightward shift of the short-run aggregate supply curve.
C) a movement upward along the aggregate demand curve.
D) a movement downward along the aggregate demand curve.
E) a movement upward along the short-run aggregate supply curve.
Aggregate Supply Curve
An illustrative depiction that exhibits the connection between total economic output and the general price level.
Real GDP
Real Gross Domestic Product measures the value of all final goods and services produced within a country's borders in a specific time period, adjusted for inflation.
- Gain an understanding of the core principles of monetary policy and how they influence aggregate demand and supply.
- Analyze how decisions in monetary policy influence real Gross Domestic Product and the overall price level.
Verified Answer
CD
Christopher DarbyJul 07, 2024
Final Answer :
A
Explanation :
A reduction in the money supply means that there is less spending power in the economy, which leads to a decrease in aggregate demand. This results in a leftward shift of the aggregate demand curve.
Learning Objectives
- Gain an understanding of the core principles of monetary policy and how they influence aggregate demand and supply.
- Analyze how decisions in monetary policy influence real Gross Domestic Product and the overall price level.
Related questions
If the Fed Adopts a Contractionary Monetary Policy,eventually We Can ...
When the Fed Decreases the Money Supply ...
Given an Upward Sloping Aggregate Supply Curve,which of the Following ...
In the Long Run,increases in the Money Supply Increase the ...
If the Money Supply in an Economy Is Increased,the Interest ...