In the IS- LM model, an increase in the money supply will cause an increase in which of the following variables?

Question

Quizplus · Accepted Answer

An increase in the money supply will shift the LM curve downward, leading to lower interest rates. Lower interest rates will increase investment (shift the investment function upward), consumption (shift the consumption function upward), and output (shift the IS curve upward). Therefore, all of the above choices are correct.

In the IS- LM Model, an Increase in the Money