Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 32, Problem 3MCQ
To determine
The correct option regarding the long run impact of decrease in money supply on aggregate
Expert Solution & Answer
Explanation of Solution
The decrease in the money supply will increase the value of money for the borrowers leading the less money in hand for general public. Less money to spend will decrease the aggregate demand for the general products which will further result in decrease in the aggregate price level.
Thus, from the above we can conclude that the correct option is C.
Chapter 32 Solutions
Krugman's Economics For The Ap® Course
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