According to the aggregate demand and aggregate supply model, in the long run a decrease in the money supply leads to A) decreases in both the price level and real GDP. B) an increase in real GDP and an increase in the price level. C) a decrease in the price level but does not change real GDP. D) an increase in the price level but does not change real GDP.
According to the aggregate demand and aggregate supply model, in the long run a decrease in the money supply leads to A) decreases in both the price level and real GDP. B) an increase in real GDP and an increase in the price level. C) a decrease in the price level but does not change real GDP. D) an increase in the price level but does not change real GDP.
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 18P
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![According to the aggregate demand and aggregate supply model, in the long
run a decrease in the money supply leads to
A) decreases in both the price level and real GDP.
B) an increase in real GDP and an increase in the price level.
C) a decrease in the price level but does not change real GDP.
D) an increase in the price level but does not change real GDP.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F995049a2-96d9-49b9-9c30-43539a3072cf%2F1e85b567-07c2-4dfd-86cb-b517396b3d5d%2Fvdx7fii.jpeg&w=3840&q=75)
Transcribed Image Text:According to the aggregate demand and aggregate supply model, in the long
run a decrease in the money supply leads to
A) decreases in both the price level and real GDP.
B) an increase in real GDP and an increase in the price level.
C) a decrease in the price level but does not change real GDP.
D) an increase in the price level but does not change real GDP.
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