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zhenek [66]
3 years ago
8

Assume an economy with no international sector.

Business
1 answer:
emmasim [6.3K]3 years ago
3 0

Answer:

A. A decrease in the money supply will lead to a decrees in nominal interests according to the money market graph.  

B. Consumer spending, government spending, and investment spending will all decrease due to the higher interest rates. It is less favorable to spend. Because it is a closed economy, net exports will not be affected.  

C1. The output of the economy will decrease because the aggregate demand shifted to the left.  

C2. The price level of the economy will decrease because the aggregate demand shifted to the left.  

Explanation:

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