-Refer to Exhibit 15-2.A(n)__________ in the money supply from S₁ to S₂ would have a tendency to __________ the amount of investment,assuming investment is sensitive to changes in the interest rate.

Question

Quizplus · Accepted Answer

An increase in the money supply typically leads to lower interest rates, which can make borrowing cheaper. This, in turn, tends to raise the amount of investment, as businesses are more likely to invest when they can do so at a lower cost.