Question

If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of banks having more money to lend?

Borrowing will decrease.
Interest rates will decrease.
Investing will decrease.
Inflation will decrease.

Answer 1

Interest rates will decrease.

With more money to lend, the supply of loanable funds increases, putting downward pressure on interest rates and making borrowing cheaper.