HRE4M1-05-Religi... Untitled document - Google Do. E ! CIA4U Ch 13 Quiz CIA4U - Chap Which of the following statements best describes the cause-and-effect chain of an expansionary monetary policy? O A decrease in the money supply will lower the interest rate, increase aggregate demand, and increase real output. O An increase in the money supply will raise the interest rate, decrease aggregate demand, and decrease real output. O An increase in the money supply will lower the interest rate, decrease aggregate demand, and increase real output. O An increase in the money supply will lower the interest rate, increase aggregate demand, and increase real output. O A decrease in the money supply will raise the interest rate, decrease aggregate demand, and decrease real output. A rise in the bank rate signifies a contractionary policy in the near future. * True False Monetary policies that cause an increase in the money supply: * O lower the interest rate, decrease spending on investment and consumer durables, and shift aggregate demand rightward O raise the interest rate, increase spending on investment and consumer durables, and shift aggregate demand rightward O raise the interest rate, decrease spending on investment and consumer durables, and shift aggregate demand leftward