Question

The economy has been sluggish in recent months with slow economic growth. Which results would lead to a strong and healthy economy?

An increase in the money supply and decrease in interest rates result in more lending and risk.
A decrease in the money supply increases interest rates, which increases lending.
A short-term profits and decrease in the money supply cause a decrease in interest rates and increased lending.
An increase in the money supply increases interest rates and inflation, which spurs economic growth.

Answer 1

A decrease in the money supply decreases interest rates, which increases lending and stimulates economic growth.