According to the Keynesian transmission mechanism,an increase in the money supply causes a(n)__________ in the interest rate and a(n)__________ in investment,which in turn causes a(n)__________ in total expenditures and aggregate demand.
A) increase; decrease; decrease
B) increase; increase; decrease
C) decrease; increase; increase
D) decrease; decrease; increase

Question

Quizplus · Accepted Answer

An increase in the money supply leads to a decrease in interest rates, which encourages more investment, resulting in an increase in total expenditures and aggregate demand.

According to the Keynesian Transmission Mechanism,an Increase in the Money