Increases in the money supply will cause demand for investment and consumption goods to _______ in the short run and cause prices to ________ in the long run.

Question

Quizplus · Accepted Answer

Increases in the money supply will cause an increase in the amount of money available for consumers to spend and for businesses to invest. This increased demand for goods and services will lead to an increase in prices in the long run as businesses respond by increasing output and raising prices to match the increased demand.

Increases in the Money Supply Will Cause Demand for Investment