Considering the internal balance in an economy,which of the following could lead to lower interest rate and higher income?
A) An increase in government spending
B) A depreciation of domestic currency
C) An increase in money supply
D) A decrease in money supply

Question

Quizplus · Accepted Answer

An increase in money supply will lead to a lower interest rate as there will be more money available in the economy. This will also lead to a higher income as businesses will have more available funds to invest and create jobs. A decrease in money supply, on the other hand, would increase interest rates and slow down economic growth. An increase in government spending or a depreciation of domestic currency could also have an impact on the economy, but they would not necessarily lead to lower interest rates and higher income.

Considering the Internal Balance in an Economy,which of the Following