- The change illustrated in the figure above is part of the transmission process of the Fed's monetary policy. As a result of the increase in the supply of loanable funds, aggregate demand_{--------------------} , real GDP_{--------------------} , and the price level _{--------------------} . A)increases; decreases; falls B)decreases; decreases; falls C)increases; increases; rises D)increases; does not change; does not change E)None of the above answers are correct.

Question

Quizplus · Accepted Answer

An increase in the supply of loanable funds typically lowers interest rates, which encourages borrowing and spending, leading to an increase in aggregate demand, real GDP, and the price level.

- the Change Illustrated in the Figure Above Is Part of of the Transmission