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

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