Using the liquidity-preference model, when the Federal Reserve decreases the money supply,
A) the equilibrium interest rate increases.
B) the aggregate-demand curve shifts to the right.
C) the quantity of goods and services demanded is unchanged for a given price level.
D) the short-run aggregate-supply curve shifts to the left.
Correct Answer:
Verified
Q123: In which of the following cases would
Q124: Figure 34-1 Q125: According to liquidity preference theory, the money-supply Q126: As the interest rate falls to equilibrium Q127: In recent years, the Federal Reserve has Q129: Which of the following would not be Q130: Liquidity preference theory is most relevant to Q131: Figure 34-2 Q132: Monetary policy Q133: Figure 34-2
(a) The Money Market
(b) The Aggregate
A)must be described in terms of
(a) The Money Market
(b) The Aggregate
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