In the Keynesian system,an increase in the money stock would

Name: In the Keynesian system,an increase in the money stock would
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Question

Quizplus · Accepted Answer

In the Keynesian system, an increase in the money stock would lead to a decrease in the interest rate, as the supply of money would exceed the demand for money. This decrease in the interest rate would, in turn, increase aggregate demand by making borrowing cheaper and reducing the cost of investment, leading to an increase in income. Hence, option (C) is the correct answer.

In the Keynesian System,an Increase in the Money Stock Would