Increases in the money supply cause higher interest rates and a positive demand shock.

Name: Increases in the money supply cause higher interest rates and a positive demand shock.
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Increases in the money supply generally lead to lower interest rates, as there is more money available for borrowing. This is known as a negative demand shock, as the increase in supply leads to a decrease in the price (interest rates) of borrowing.

Increases in the Money Supply Cause Higher Interest Rates and a Positive