Suppose the demand for money and the supply of money increase simultaneously.We can:

Question

Quizplus · Accepted Answer

The simultaneous increase in both the demand for money and the supply of money would result in an unclear impact on the interest rate and bond prices. The demand and supply sides could offset each other, resulting in no change or shift left or right of the demand and supply curves. Therefore, it is not possible to predict what will happen to the interest rate or bond prices. As a consequence, it is uncertain whether real output will expand or contract.

Suppose the Demand for Money and the Supply of Money