Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Why decrease in money supply will causes the real interest rate to remain unchanged and price level fall? I though that decrease in money supply
Why decrease in money supply will causes the real interest rate to remain unchanged and price level fall? I though that decrease in money supply will shift the LM curve up to the left, isn't interest rate rise and price level rise?
A decrease in money supply causes the real interest rate to and the price level to__in general equilibrium. a. remain unchanged; fall b. remain unchanged; rise c. rise; rise d. fall; remain unchanged Your answer is incorrect. The correct answer is: remain unchanged; fall
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started