when does an increase in the money supply lead to an incease in the rate of growth of real GDP?

Question

the equation of exchange would be nice.

Answer 1

Increase in the money supply causes increased growth; this is because both investment and consumption are subject to the interest rate.

Higher interest rates decrease both, here are your requested equations:

Consumption = Autonomous Consumption - INTEREST RATE * some function causing relative consumption

Investment = autonomous investment - INTEREST RATE * some function causing relative investment

In both cases, higher interest rates decrease consumption and investment.

The caveat here is that high economic growth can cause inflation.

Answer 2

An increase in the money supply leads to inflation. It can lead to an increase in the rate of growth of real GDP if the increased money supply is used for investment, which will increase the output of the economy. Increased output is what will cause real GDP to increase, since real GDP is controlled for inflation and thus measures actual stuff produced and sold.

Answer 3

interior the quick run, a upward thrust interior the money grant will enhance GDP because of the fact there will be a shrink in nominal expenses of interest. This motives the interest-comfortable aspects of GDP to enhance. If the financial equipment, whether, is already interior the long-run, then GDP should not be affected.