Which Best Describes the Keynesian Transmission Mechanism When the Money

Multiple Choice

Which best describes the Keynesian transmission mechanism when the money supply increases?

A) The interest rate rises; this in turn reduces investment spending,which in turn raises total expenditures and shifts the AD curve rightward.
B) The interest rate falls; this in turn stimulates investment spending,which in turn raises total expenditures and shifts the AD curve leftward.
C) The interest rate falls; this in turn stimulates investment spending,which in turn raises total expenditures and shifts the AD curve rightward.
D) The interest rate falls; this in turn stimulates investment spending,which in turn lowers total expenditures and shifts the AD curve leftward.