Figure 14-6

-Refer to Figure 14-6.If the money supply is increased in Panel (a) from MS₁ to MS₂, then in Panel (b) , the quantity of investment demanded _____, and this will lead to a rightward shift of the ________.

Question

Figure 14-6
Figure 14-6 -Refer to Figure 14-6.If the money supply is increased in Panel (a) from MS<sub>1</sub> to MS<sub>2</sub>, then in Panel (b) , the quantity of investment demanded _____, and this will lead to a rightward shift of the ________. A) decreases; aggregate supply curve B) increases; aggregate demand curve C) increases; investment demand curve D) decreases; investment demand curve

Figure 14-6 -Refer to Figure 14-6.If the money supply is increased in Panel (a) from MS<sub>1</sub> to MS<sub>2</sub>, then in Panel (b) , the quantity of investment demanded _____, and this will lead to a rightward shift of the ________. A) decreases; aggregate supply curve B) increases; aggregate demand curve C) increases; investment demand curve D) decreases; investment demand curve

-Refer to Figure 14-6.If the money supply is increased in Panel (a) from MS₁ to MS₂, then in Panel (b) , the quantity of investment demanded _____, and this will lead to a rightward shift of the ________.

Quizplus · Accepted Answer

An increase in the money supply typically lowers interest rates, which encourages more investment. This increase in investment demand leads to a rightward shift of the aggregate demand curve.

Figure 14-6 -Refer to Figure 14-6.If the Money Supply Is Increased in Supply