An increase in the money supply will

Name: An increase in the money supply will
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the money supply is increased, there is more money available in the economy. This leads to a decrease in interest rates because there is more money for banks to lend out, which increases competition for borrowers and drives interest rates down. Lower interest rates make it cheaper for people and businesses to borrow money, which stimulates spending and investment, thereby increasing the equilibrium GDP.

An Increase in the Money Supply Will