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8 years ago
Which of the following sequence of events occurs in response to a contractionary fiscal policy?
A) Aggregate output decreases, causing money demand to decrease, causing the interest rate to decrease and planned investment to increase.
B) Aggregate output increases, causing money demand to increase, causing interest rates to increase and planned investment to decrease.
C) Aggregate output decreases, causing money demand to increase, causing interest rates to increase and planned investment to decrease.
D) Aggregate output decreases, causing the demand for money to increase, causing interest rates to increase and planned investment to increase.
Textbook 
Principles of Macroeconomics

Principles of Macroeconomics


Edition: 11th
Authors:
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JesslynJesslyn
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NYC Author
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#2
8 years ago
Perfect answer, thank you
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