What happens when there is decrease in money supply?

      

What happens when there is decrease in money supply?

  

Answers


william
Aggregate demand will increase. The reverse will be true when money supply decreases. That is a decrease in the money supply will lead to a decrease in the amount of money that people and firms will hold and as a result they will spend less. This will cause aggregate demand to decrease.
steve williams answered the question on January 23, 2018 at 11:47


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