Lower interest rates are often a result of increased money supply, which leads to more investment and more money in consumers' hands, which in turn boosts consumption. In the long run, a rise in the money supply will typically result in higher prices. Increases in the money supply may also result in higher national output.
The higher the money supply, the more the price level will rise and the lower the national output will expand, the lower the labor and capital unemployment rate. In general, the value of money in circulation rises when the GDP growth rate indicates increased economic productivity.
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