An increase in the money supply may __________ total expenditures,leading to a __________ shift of the AD curve.
A) increase; rightward
B) increase; leftward
C) decrease; rightward
D) decrease; leftward

Question

Quizplus · Accepted Answer

An increase in the money supply would increase total expenditures, leading to a rightward shift of the AD (aggregate demand) curve. This is because there would be more money available to spend, thereby increasing demand for goods and services, which would in turn increase prices and output.

An Increase in the Money Supply May __________ Total Expenditures,leading