In the short run,an increase in the money supply causes interest rates to
A)increase,and aggregate demand to shift right.
B)increase,and aggregate demand to shift left.
C)decrease,and aggregate demand to shift right.
D)decrease,and aggregate demand to shift left.

Question

Quizplus · Accepted Answer

An increase in the money supply typically lowers interest rates, making borrowing cheaper, which encourages spending and investment, thus shifting aggregate demand to the right.

In the Short Run,an Increase in the Money Supply Causes