If the money supply in an economy is increased,the interest rate will fall,and real GDP will decrease.

Money Supply

The entirety of monetary valuables available in an economy at any chosen time, featuring cash in the form of coins and notes, along with the sums in checking and savings accounts.

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), representing the value of all goods and services produced over a specific period.

Ascertain the influence of monetary policy on the total market demand and real Gross Domestic Product.
Investigate the consequences of money supply fluctuations on planned investment initiatives and nominal GDP.

Verified Answer

Kiera RiveraJul 14, 2024

Final Answer :

False

Explanation :

Increasing the money supply in an economy can lead to lower interest rates, which generally stimulates borrowing and spending, leading to an increase in real GDP.

Learning Objectives

Ascertain the influence of monetary policy on the total market demand and real Gross Domestic Product.
Investigate the consequences of money supply fluctuations on planned investment initiatives and nominal GDP.

If the money supply in an economy is increased,the interest rate will fall,and real GDP will decrease.

Definitions

Learning Objectives

Learning Objectives

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