What actions should the Fed take if it believes the economy is about to experience a high rate of inflation? Now, let's assume you are the President of the Fed and you have to make certain decisions in our economy. If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:

1. The money supply
2. Interest rates
3. Investment
4. Consumption
5. Net Exports
6. The aggregate demand curve
7. Real GDP
8. The price level