An Increase in the Money Supply Will Affect Aggregate Demand

question 114

Multiple Choice

An increase in the money supply will affect aggregate demand

• A) only if the increase in the money supply causes interest rates to rise.
• B) only if the increase in the money supply causes people to buy less goods and services.
• C) only if the increase in the money supply causes people to increase their saving.
• D) if the increase in the money supply causes interest rates to fall and/or causes people to buy more goods and services.

---

Definitions:

Family Wealth

The net value of all assets, including cash, properties, and investments, owned collectively by members of a family.

Government Part

The role or section of government responsible for particular policy areas, functions, or activities.

Poverty

A state where an individual or community lacks the financial resources and essentials for a minimum standard of living.

Labor Market

The labor market is a marketplace where workers seek employment and employers seek workers, governed by the forces of supply (workers) and demand (jobs), influencing wages and working conditions.