The following is a list of economic events:
1.A big cut in the price of imported oil.
2.An increase in the money supply.
3.An increase in labour productivity.
4.A decline in the GDP of the USA
5.A big rise in nominal wages.
-Refer to the information above to answer this question.Which of the listed economic events will cause an increase in aggregate demand?
A)1 only.
B)2 only.
C)1 and 2.
D)1,2 and 5.

Question

Quizplus · Accepted Answer

An increase in the money supply (2) typically leads to lower interest rates, encouraging borrowing and spending, thus increasing aggregate demand.

The Following Is a List of Economic Events