<u>The option (C) is correct. Increasing the money supply would most likely increase bank lending.
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Further Explanation:
Law of Supply:
This law states that the increase in the price of the goods would result in the increase in the supply of the Therefore and vice versa. The upward sloping because the institution and price of the goods are directly proportionate to each other.
Factors affecting the supply curve are:
• Technology improvement
• Prices
• Time
• Policies of the government
• Expectations
• Market size
Effect of increase in the money supply:
When the money supply in the economy increases. The rate would decrease. The decrease in the interest would result in the cheaper loans. Therefore, banks and other financial institution would be able to provide loans at the rate of interest. The cheaper loans would lure the publican and it will increase the bank landing.
<u>Thus, the increase in the money supply will result in an increased bank landing.
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Learn more:
1. Law of demand and supply
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2. Effect on demand
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3. Demand and Supply
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Answer details:
Grade: Middle School
Subject: Economic
Chapter: Law of Supply
Keywords: Increasing, money, supply, most likely, decrease, consumer, spending, decrease, inflation, increase, bank lending, unemployment.
