Identify the correct statement about changes in money supply.

A) A decrease in money supply causes interest rates to fall.
B) A decrease in money supply causes investment spending to increase.
C) A decrease in money supply causes gross domestic product to increase.
D) A decrease in money supply causes investment spending to decrease.
E) A decrease in money supply causes aggregate expenditure to increase.

Money Supply

The full quantification of financial means in an economy at a certain point in time, including tangible currency like coins and notes and virtual balances in checking and savings accounts.

Interest Rates

The percentage of a sum of money charged for its use, influencing investment and consumption in the economy.

Investment Spending

Expenditures on new physical capital, such as buildings and machinery, and on inventory investments by businesses, contributing to economic output.