An increase in the money supply by the Federal Reserve is likely to increase
I. consumption expenditures
II. investment expenditures
III. interest rates
IV. the exchange rate

Question

An increase in the money supply by the Federal Reserve is likely to increase 
I. consumption expenditures
II. investment expenditures
III. interest rates
IV. the exchange rate

Quizplus · Accepted Answer

An increase in the money supply typically lowers interest rates, which can boost consumption and investment expenditures. However, it generally leads to a decrease in interest rates and the exchange rate, not an increase.

An Increase in the Money Supply by the Federal Reserve