An increase in the money supply causes ____________
A. interest rates to fall, investment spending to rise, and aggregate demand to rise B. interest rates to rise. investment spending to rise. and aggregate demand to rise C. interest rates to rise. investiment spending to fall, and aggregate demand to fall D. interest rates to fall, investment spending to fall, and aggregate demand to fall E. all of the above
Correct Answer: A
Explanation
When there is abundant money in the circulation, the interest rate will fall, the investment will increase and when investment increase, aggregate demand will increase.
