Which of the Following Best Describes the Cause-Effect Chain of an Expansionary

question 378

Multiple Choice

Which of the following best describes the cause-effect chain of an expansionary monetary policy?

• A) A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP.
• B) A decrease in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.
• C) An increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.
• D) An increase in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP.

---

Definitions:

Unilaterally Determine

To make a decision or take action independently, without the need for agreement from others.

Pay Employees

To pay employees means to compensate workers for their services or labor as agreed upon in their employment contract or by regulatory guidelines.

Hours

The measurement of time that an individual works on a given day or for a specific project.

National Labor Relations Board

is an independent federal agency in the United States responsible for enforcing US labor law in relation to collective bargaining and unfair labor practices.