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kherson [118]
3 years ago
7

According to the Keynesian transmission mechanism, a rise in the money supply will __________ the interest rate, causing a _____

_____ in investment demand, which then __________ Real GDP.a. raise; fall; raisesb. raise; rise; lowersc. raise; fall; lowersd. lower; fall; lowerse. lower; rise; raises
Business
1 answer:
Len [333]3 years ago
7 0

Answer: The correct answer "e. lower; rise; raises".

Explanation: According to the keynesian transmission mechanism, a rise in the money supply will <u>lower</u> the interest rate, causing a <u>rise</u> in investment demand, which then <u>raises</u> Real GDP.

because a decrease in the interest rate, would cause companies to decide to take loans to invest, thus increasing investment and as a result would increase GDP

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