If the money supply in the economy were at MS2, and the Federal Reserve Bank used open market operations to move money supply to MS1 the overall result in the economy would be:

A. Aggregate demand shifted in, causing GDP to fall.
B. LRAS move to the FE level of output.
C. Aggregate demand shifted out, causing GDP to rise
D. Aggregate supply shifted in, causing GDP to fall.


Answer: A

Economics

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