In the short run, an increase in the money supply will cause output:
A) to remain the same.
B) to decrease.
C) to become zero.
D) to increase.

Name: In the short run, an increase in the money supply will cause output: A) to remain the same. B) to decrease. C) to become zero. D) to increase.
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Question

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An increase in the money supply will lead to lower interest rates, making it easier for households and firms to finance investments, which will increase aggregate demand, output, and employment in the short run.

In the Short Run, an Increase in the Money Supply