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    Money the Financial System
  4. Exam
    Exam 24: Linking the Financial System and the Economy: the Is-Lm-Fe Model
  5. Question
    In the Short Run, an Increase in the Money Supply
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In the Short Run, an Increase in the Money Supply

Question 3

Question 3

Multiple Choice

In the short run, an increase in the money supply will lead to


A) an increase in both GDP and interest rates.
B) an increase in interest rate but a decrease in GDP.
C) a decrease in both GDP and interest rates.
D) an increase in GDP but a decrease in interest rates.

Correct Answer:

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