$\rightarrow\downarrow$
-Given that M represents the money supply,i represents interest rates,I represents investment,AD represents aggregate demand,V represents the velocity of money,and Q represents the economy's real output level,Keynesian theory can be represented by:
A)$\uarr$ M $\rightarrow\downarrow$ i $\rightarrow$ $\uarr$ I $\rightarrow$ $\uarr$ AD $\rightarrow$ $\uarr$ Q
B) $\uarr$M $\rightarrow\uarr$ i $\rightarrow\downarrow$ I $\rightarrow\uarr$ AD $\rightarrow\uarr$ Q.
C) $\uarr$M $\rightarrow\downarrow$V $\rightarrow\downarrow$I $\rightarrow\uarr$ AD $\rightarrow\uarr$ Q.
D) $\uarr$M $\rightarrow\downarrow$ i $\rightarrow\uarr$ V $\rightarrow\uarr$ AD $\rightarrow\uarr$ Q.

Question

$\rightarrow\downarrow$ 
-Given that M represents the money supply,i represents interest rates,I represents investment,AD represents aggregate demand,V represents the velocity of money,and Q represents the economy's real output level,Keynesian theory can be represented by:
A)$\uarr$ M $\rightarrow\downarrow$ i $\rightarrow$  $\uarr$ I $\rightarrow$  $\uarr$ AD $\rightarrow$  $\uarr$ Q
B) $\uarr$M $\rightarrow\uarr$  i $\rightarrow\downarrow$ I $\rightarrow\uarr$ AD $\rightarrow\uarr$  Q.
C) $\uarr$M $\rightarrow\downarrow$V $\rightarrow\downarrow$I $\rightarrow\uarr$  AD $\rightarrow\uarr$  Q.
D) $\uarr$M $\rightarrow\downarrow$ i $\rightarrow\uarr$  V $\rightarrow\uarr$  AD $\rightarrow\uarr$  Q.

Quizplus · Accepted Answer

Keynesian theory suggests that an increase in the money supply (M) leads to a decrease in interest rates (i), which in turn leads to an increase in investment (I) and aggregate demand (AD). This increase in AD then leads to an increase in the economy's real output level (Q).

→↓\rightarrow\downarrow→↓ -Given That M Represents the Money Supply,i Represents Interest Rates,I

$\rightarrow\downarrow$ -Given That M Represents the Money Supply,i Represents Interest Rates,I