Increases in the money supply will cause demand for investment and consumption goods to __________ in the short run and may cause prices to __________ in the long run.

Respuesta :

Answer:

The answer is increase, increase

Explanation:

Increase in money supply i.e more money in circulation will cause an INCREASE in demand for investment and consumption goods because firms have more money to purchase equipment for investing activities and households have more left for more consumption in the short run.

And in the long run, this increased demands from households and businesses will INCREASE the prices demand will be more than supply or too much money chasing fewer goods.

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