In the New Keynesian Approach, an Increase in the Nominal

Multiple Choice

In the new Keynesian approach, an increase in the nominal money supply affects output by

A) directly increasing the wealth of consumers and, therefore, their spending.
B) reducing the real interest rate, thereby stimulating consumption, investment, and net exports.
C) allowing the government to increase its expenditures.
D) increasing the funds available for saving, thereby stimulating investment spending.