If the Fed increases the quantity of money,________ economists believe that the ________.
A) Keynesian; aggregate supply curve shifts rightward
B) Keynesian; structural deficit increases
C) monetarist; cyclical deficit increases
D) monetarist; aggregate demand curve shifts rightward

Question

Quizplus · Accepted Answer

Monetarist economists believe that an increase in the quantity of money will lead to an increase in aggregate demand. This will shift the aggregate demand curve rightward, leading to an increase in output, employment, and prices in the short run.

If the Fed Increases the Quantity of Money,________ Economists Believe