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A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Oct/Nov 2025 · Q221 Mark

What is the effect of an increase in the money supply on the interest rate and the aggregate demand (AD) curve?

Ainterest rate: falls, AD curve: shifts left
Binterest rate: rises, AD curve: shifts left
Cinterest rate: falls, AD curve: shifts right
Dinterest rate: rises, AD curve: shifts right

✓ Correct answer

C: interest rate: falls, AD curve: shifts right

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About this question

Topic
Government macroeconomic intervention, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source
A-Level Economics, Oct/Nov 2025 Paper 1 Variant 2, question 22.

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