If money demand falls on its own (i.e. ,not in response to a spending shock),what must the Fed do to stabilize GDP?
A) Increase the money supply
B) Decrease the money supply
C) Leave the money supply and money demand unchanged
D) Increase money demand
E) Decrease money demand.

Question

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The Answer of If money demand falls on its own (i.e. ,not in response to a spending shock),what must the Fed do to stabilize GDP?
A) Increase the money supply
B) Decrease the money supply
C) Leave the money supply and money demand unchanged
D) Increase money demand
E) Decrease money demand.

If Money Demand Falls on Its Own (I