In the short run, ________ in the supply of money ________ the level of output.
A) increases; decrease
B) increases; do not change
C) increases; increase
D) decreases; do not change

Question

Quizplus · Accepted Answer

An increase in the supply of money in the short run will increase the level of output. This is due to the fact that an increase in the supply of money leads to lower interest rates, which in turn stimulates investment and consumer spending, thus increasing output levels.

In the Short Run, ________ in the Supply of Money