In the ________ increases in the supply of money will ________.
A) short run; raise total demand and output
B) long run; raise total demand and output
C) long run; lead to lower prices
D) short run; decrease total demand and output

Question

Quizplus · Accepted Answer

In the short run, an increase in the supply of money will increase total demand as individuals and businesses have more money to spend, resulting in an increase in output. However, in the long run, the increase in the supply of money will lead to inflationary pressures and result in higher prices. Therefore, choice A is the best option.

In the ________ Increases in the Supply of Money Will