An increase in the money supply shifts the LM curve to the right,causing the interest rate to ________ and output to ________,everything else held constant.
A)rise;rise
B)rise;fall
C)fall;rise
D)fall;fall

Question

Quizplus · Accepted Answer

An increase in the money supply shifts the LM curve to the right, leading to a decrease in the interest rate and an increase in output, as the cost of borrowing decreases, encouraging investment and consumption.

An Increase in the Money Supply Shifts the LM Curve