According to the interest-rate-based transmission mechanism, a decrease in the money supply will

A. lead to an increase in investment spending and a decrease in real GDP that is equal to the increase in investment spending.
B. lead to a decrease in investment spending and a decrease in real GDP which is greater than the decrease in investment spending.
C. lead to an increase in investment spending and a decrease in real GDP which is greater than the increase in investment spending.
D. lead to a decrease in investment spending and an increase in real GDP that is equal to the decrease in investment spending.


Answer: B

Economics

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