The monetary policy increasesdecreases the economies demand, Ask an Expert

Economics

Suppose that, in an attempt to combat severe inflation, the government decides to decrease the amount of money in circulation in the economy.

The monetary policy (increases/decreases) the economies demand for goods and services, leading to (lower/higher) product prices. In the short run, the change in prices induces firms to produce (fewer/more) goods and services. This, in turn, leads to a (higher/lower) level of unemployment.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9478140

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