According to Proponents of the Interest-Rate-Based Monetary Policy Transmission Mechanism

Multiple Choice

According to proponents of the interest-rate-based monetary policy transmission mechanism, any increase in the money supply

A) is effective in increasing Gross Domestic Product (GDP) only if it causes an outward shift of the aggregate supply curve.
B) will increase Gross Domestic Product (GDP) only if interest rates fall and investment is sensitive to decreasing interest rates.
C) causes velocity to increase, and so in the short run nominal Gross Domestic Product (GDP) must increase.
D) will move the economy from the "liquidity trap" during times of recession if interest rates fall enough to stimulate private investment.