QuestionJuly 27, 2025

What would be the likely goal of an increase in money supply? Higher interest rates and lower GDP Lower interest rates and higher GDP Higher interest rates and higher GDP Lower interest rates and lower GDP.

What would be the likely goal of an increase in money supply? Higher interest rates and lower GDP Lower interest rates and higher GDP Higher interest rates and higher GDP Lower interest rates and lower GDP.
What would be the likely goal of an increase in money supply?
Higher interest rates and lower GDP
Lower interest rates and higher GDP
Higher interest rates and higher GDP
Lower interest rates and lower GDP.

Solution
4.2(121 votes)

Answer

Lower interest rates and higher GDP Explanation 1. Understand the effect of money supply on interest rates Increasing the money supply typically leads to lower interest rates because more money is available for borrowing. 2. Understand the effect of money supply on GDP Lower interest rates generally encourage borrowing and investing, leading to higher GDP as economic activity increases.

Explanation

1. Understand the effect of money supply on interest rates<br /> Increasing the money supply typically leads to lower interest rates because more money is available for borrowing.<br /><br />2. Understand the effect of money supply on GDP<br /> Lower interest rates generally encourage borrowing and investing, leading to higher GDP as economic activity increases.
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