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Colt1911 [192]
3 years ago
8

What happens when money supply decreases?

Advanced Placement (AP)
1 answer:
lubasha [3.4K]3 years ago
8 0
Therefore aggregate demand will increase. The reverse will be true when money supply decreases. That is a decrease in the money supply will lead to a decrease in the amount of money that people and firms will hold and as a result they will spend less. This will cause aggregate demand to decrease. YOUR WELCOME
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