When changes in the supply of money are implemented, it makes interest rates change in the _____ direction as the shift in the money supply curve and makes aggregate demand change in the _____ direction as the shift in the money supply curve.
A)Same; same.
B)Same; opposite.
C)opposite; same.
D)Opposite; opposite.

Question

When changes in the supply of money are implemented, it makes interest rates change in the _____ direction as the shift in the money supply curve and makes aggregate demand change in the _____ direction as the shift in the money supply curve.
A)​Same; same.
B)​Same; opposite.
C)​opposite; same.
D)​Opposite; opposite.

Quizplus · Accepted Answer

Changes in the supply of money cause interest rates to change in the opposite direction as the shift in the money supply curve, meaning that an increase in the money supply leads to lower interest rates, and vice versa. Conversely, changes in the supply of money cause aggregate demand to change in the same direction as the shift in the money supply curve, meaning that an increase in the money supply leads to an increase in aggregate demand, and vice versa. Therefore, option C is the correct answer.

When Changes in the Supply of Money Are Implemented, It