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How does contractionary monetary policy affect rgdp and gdp deflator?

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  1. RGDP in short-run will contract too but in long-run unaffected (due to money-neutrality in a long-run).

    Deflator in short-run falling (may fall even below 1 or 100 - depends how measure) - in long-run general price level may decrease or inflation slowed-down.

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