An increase in the money supply will cause an increase in which of the following variables?

Question

Quizplus · Accepted Answer

An increase in the money supply will lead to a decrease in interest rates, making borrowing cheaper and investment more attractive, encouraging consumption by households, and increasing output due to increased investment and consumption. Therefore, all of the above variables will increase with an increase in the money supply.

An Increase in the Money Supply Will Cause an Increase