【正确答案】 B

【答案解析】If the U.S. Federal Reserve increases the money supply, a decrease in nominal and real interest rates will occur. Lower real rates will cause businesses to invest more, which will cause the unemployment rate to decline. Furthermore, households will increase purchases of durable goods, automobiles, and other items that are typically financed at short-term rates. This will increase aggregate demand. The increase in aggregate demand and expenditures will cause incomes to go up, which further increases consumption and investment. This process is repeated and, although not all income gains increase consumption, the eventual effect can be much greater than the initial increase in aggregate demand. This increase in aggregate demand will increase real GDP and the price level in the short run and the long run.