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Question
In the long run, the effect of a reduction in the money supply is to
A) decrease the price level only.
B) decrease real Gross Domestic Product (GDP) only.
C) decrease both the price level and real Gross Domestic Product (GDP).
D) decrease the price level and increase real Gross Domestic Product (GDP).
Answer
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Related questions
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Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expectA) the quantity demanded is Q 2.B) a surplus will occur.C) price to decline until an equilibrium is achieved at P0.D) consumers to bid against each other for goods and force the price even higher.
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