An increase in the money supply will increase both the amount of money demanded and output.

Question

Quizplus · Accepted Answer

An increase in the money supply will generally lead to an increase in the amount of money demanded since people will have more money to spend. In turn, this can lead to an increase in output as firms produce more goods and services to meet the higher demand. However, the extent to which output increases depends on a variety of factors, including the overall health of the economy and the responsiveness of firms to changes in demand.

An Increase in the Money Supply Will Increase Both the Amount