An Increase in the Money Supply

question 68

Multiple Choice

An increase in the money supply:

• A)increases income and lowers the interest rate in both the short run and in the long run.
• B)increases income in both the short run and in the long run but leaves the interest rate unchanged in the long run.
• C)lowers the interest rate in both the short run and in the long run but leaves income unchanged in the long run.
• D)lowers the interest rate and increases income in the short run but leaves both unchanged in the long run.

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Definitions:

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