9. When the Fod increaseoey woy, a. increases becausethen b, iscreses because te

Question

9. When the Fod increaseoey woy, a. increases becausethen b, iscreses because tes c. decreases becausethe resutiog increagefennstooaeesleews d. decreases becausethe resuling ses nvestment investment 10. According to the equation of ea rillion, the velocity of money a. must be 6 b. must be 1/6 c. must be 6 trillion d. must be 1/6 trillion For interest rates to remain stabledangenonc a. decrease at a faster rate than the demand i me b grow at the same rate as modaund c. grow at a faster rate than moeydm d. gow at a slower rate than mosey demand l. team sue

Explanation / Answer

First question is answered below

1.Correct option: (b)
Reason: An increase in money supply shifts MS curve to the right. Keeping MD constant, this leads to a fall in interest rate.
Also, demand for goods and services increases due to this, leading to an increase in both prices and GDP.

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