In the long run,if the Fed decreases the growth rate of the money supply,
A)inflation will be lower.
B)unemployment will be higher.
C)real GDP will be lower.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

If the Fed decreases the growth rate of the money supply, it will lead to lower inflation in the long run as there will be less money chasing the same amount of goods and services. However, it may not have a direct effect on unemployment or real GDP.

In the Long Run,if the Fed Decreases the Growth Rate