If the money supply doubles, then

Question

Quizplus · Accepted Answer

None of the given scenarios occur as a direct result of the money supply doubling. Real GDP is determined by a variety of factors beyond the money supply, and would not necessarily double. Real money demand would not double, as the demand for money is a function of various factors including interest rates and income levels. The interest rate, i, would not necessarily double, as it is influenced by a variety of factors beyond just the money supply.

If the Money Supply Doubles, Then