Suppose that the money marcket in westlandia is initially, Business Economics

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Suppose that the money marcket in westlandia is initially

Suppose that the money marcket in Westlandia is initially in equilibrium and the central bank decides to decrease the money supply.

a. Using a diagram, explain what will happen to the interest rate in the short run?

b. What will happen to the interest rate in the long run?

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Business Economics: Suppose that the money marcket in westlandia is initially

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