If money supply and money demand both increased:
A)nominal interest rates would increase and investment would increase.
B)nominal interest rates would increase and investment would decrease.
C)nominal interest rates would decrease and investment would increase.
D)the change in nominal interest rates and investment would be indeterminate.

Question

If money supply and money demand both increased:
A)​nominal interest rates would increase and investment would increase.
B)​nominal interest rates would increase and investment would decrease.
C)​nominal interest rates would decrease and investment would increase.
D)​the change in nominal interest rates and investment would be indeterminate.

Quizplus · Accepted Answer

The change in nominal interest rates and investment would be indeterminate, as both factors have increased, which could potentially offset each other. The impact on nominal interest rates and investment would depend on the magnitude of the increase in money supply and money demand, as well as other economic factors at play.

If Money Supply and Money Demand Both Increased