(i) State whether you agree or disagree with the following statement

Explain what happens to (ii) MS and (iii) interest rates

When the real economy expands (Y rises), the demand for money expands. As a result, households hold more cash and the supply of money expands.

Please choose one of the following answerers for each

1) Agree or Disagree

a) agree

b) disagree

2) Impact on MS

a) increase

b) decrease

c) remain unchanged

3) Impact on interest rate

a) increase

b) decrease

c) remain unchanged