An increase in the money supply typically lowers interest rates and encourages spending and investment, which can lead to an increase in equilibrium GDP. Therefore, the correct answer is:
lower interest rates and increase the equilibrium GDP.
An increase in the money supply will
Multiple Choice
lower interest rates and lower the equilibrium GDP.
lower interest rates and increase the equilibrium GDP.
increase interest rates and increase the equilibrium GDP.
increase interest rates and lower the equilibrium GDP.
1 answer