The monetary mechanism is the way in which changes in the money supply affect expenditure and AD and equilibrium real GDP.

Name: The monetary mechanism is the way in which changes in the money supply affect expenditure and AD and equilibrium real GDP.
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The monetary mechanism describes how variations in the money supply can influence spending, aggregate demand (AD), and the equilibrium level of real Gross Domestic Product (GDP), by affecting interest rates, investment, and consumption.

The Monetary Mechanism Is the Way in Which Changes in the Money