Question

question 7 of 10
as the amount of money supply increases, interest rates _____, which, in turn,
causes spending to _____.

a. decrease; decrease
b. increase; increase
c. increase; decrease
d. decrease; increase

Explanation:

In economics (a subfield of Business), when money supply increases, the supply of loanable funds rises. This leads to a decrease in interest rates (since there's more money available to lend, lenders lower rates to attract borrowers). Lower interest rates make borrowing cheaper, so individuals and businesses are more likely to borrow and spend, thus causing spending to increase. So as money supply increases, interest rates decrease and spending increases, matching option D.

Answer:

D. decrease; increase