The Most Likely Impact of an Unanticipated Increase in the Money

question 192

Multiple Choice

The most likely impact of an unanticipated increase in the money supply is

• A) an increase in the real interest rate, which in turn stimulates investment and GDP.
• B) a decrease in the real interest rate, which in turn stimulates investment and GDP.
• C) a reduction in the general level of prices, which will increase the disposable income of households.
• D) an improvement in technology, which will stimulate both output and employment.

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