If the central bank increases the money supply at the same time as government spending increases,then:
A)interest rates must increase.
B)interest rates must decrease.
C)income must increase.
D)income must decrease.

Question

Quizplus · Accepted Answer

When the central bank increases the money supply, it typically lowers interest rates, making borrowing cheaper and encouraging spending and investment. At the same time, increased government spending injects more money into the economy, boosting demand for goods and services. Both actions together can lead to an increase in overall economic activity and income.

If the Central Bank Increases the Money Supply at the Same