If Money Supply and Money Demand Both Increased

question 41

Multiple Choice

If money supply and money demand both increased:

• A)interest rates would increase and investment would increase.
• B)interest rates would increase and investment would decrease.
• C)interest rates would decrease and investment would increase.
• D)interest rates would decrease and investment would decrease.
• E)the change in interest rates and investment would be indeterminate.

---

Definitions:

Capital and Financial Account

Components of a country's balance of payments, recording the transactions of assets and liabilities, such as direct investments, portfolio investments, and other investments across borders.

Net Exports

The value of a country's total exports minus the value of its total imports, indicating the balance of trade.

National Debt

The total amount of money that a country’s government has borrowed by issuing securities and not yet repaid.