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What Impact Will an Increase in the Money Supply Have

Question 41

Multiple Choice

What impact will an increase in the money supply have on the economy?


A) It will probably result in inflation if the economy is fully employed.
B) It will shift the aggregate demand curve to the left, decreasing demand.
C) It will definitely result in inflation if unemployment is high and there is much unused industrial capacity.
D) It will cause interest rates to rise.

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