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18 Aug 2020
According to the interest-rate-based monetary policy transmission mechanism, an increase in the money supply generates:
a. lower interest rates, which causes an increase in planned real investment spending and an increase in aggregate demand.
b. spending on consumer goods and services directly, which causes an increase in aggregate demand.
c. an increase in nominal GDP and a change in the price level, but no change in real GDP.
d. an increase in aggregate supply since the supply of money is part of aggregate supply.
According to the interest-rate-based monetary policy transmission mechanism, an increase in the money supply generates:
a. lower interest rates, which causes an increase in planned real investment spending and an increase in aggregate demand.
b. spending on consumer goods and services directly, which causes an increase in aggregate demand.
c. an increase in nominal GDP and a change in the price level, but no change in real GDP.
d. an increase in aggregate supply since the supply of money is part of aggregate supply.
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Sonia DhawanLv10
19 Oct 2020
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