1. When the central bank tightens the money supply: real balances rise in the short run. nominal interest rates fall in

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answerhappygod
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1. When the central bank tightens the money supply: real balances rise in the short run. nominal interest rates fall in

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1. When the central bank tightens the money supply:
real balances rise in the short run.
nominal interest rates fall in the short run.
nominal interest rates fall in the long run.
the inflation rate immediately falls.
2.
According to the theory of liquidity preference, a decrease inincome will ______ interest rates, and according to the quantityequation (assuming velocity is not constant), a decrease ininterest rates will ______ income.
increase; decrease
decrease; decrease
increase; increase
decrease; increase
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