Increases in the money supply will cause demand for investment and consumption goods to _______ in the short run and cause prices to ________ in the long run.

Question

Quizplus · Accepted Answer

In the short run, increases in the money supply will lead to an increase in demand for investment and consumption goods, as individuals have more money to spend. However, in the long run, prices will start to rise as there is more money in circulation, causing inflation.

Increases in the Money Supply Will Cause Demand for Investment