Which one of the following is a correct sequence of events following a decrease in price level, assuming no change in government spending, taxes, and money supply? Group of answer choices Money demand decreases; interest rate decreases; and aggregate output decreases. Money demand increases; interest rate decreases; and investment increases. Money demand decreases; interest rate decreases; and aggregate output increases. Money demand increases; interest rate increases; and aggregate output decreases

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
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Which one of the following is a correct sequence of events following a decrease in price level, assuming no change in government spending, taxes, and money supply?
Group of answer choices
Money demand decreases; interest rate decreases; and aggregate output decreases.
Money demand increases; interest rate decreases; and investment increases.
Money demand decreases; interest rate decreases; and aggregate output increases.
Money demand increases; interest rate increases; and aggregate output decreases.
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