Please help! The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?

Contractional and Expansionary Monetary policy

Explanation:

Changes in money supply present themselves in contractionary and expansionary policy. The contractionary policy reduces the supply of money in the economy. This in turn reduces GDP and reduction in consumer purchasing power and consequently less revenue for businesses. Conversely, the expansionary policy increases supply of money in the economy, increase GDP and consumer spending and shift the aggregate demand curve to the right, consequently resulting in higher revenue for businesses.

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maryland

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