Assuming That the Central Bank Is Following a Money Stock

Multiple Choice

Assuming that the central bank is following a money stock targeted,an exogenous rise in investment demand

A) causes income to rise but the money stock has to be increased to accommodate the expansion.
B) has to be accommodated with open market purchases to expand the money stock.
C) increases income,money demand,and lowers the interest rate.
D) increases income and money demand and lowers the interest rate.
E) none of the above.