Assume (other things constant) that the Fed increases the money supply. The mechanism through which aggregate demand increases is, according to interest-rate-based transmission mechanism, summarized as follows: Select one:
a. increase in money supply _ decrease in money balances held _ decrease in interest rates _ increase in planned investment spending _ increase in aggregate demand.
b. increase in money supply _ decrease in interest rates _ increase in planned investment spending _ increase in aggregate demand.
c. the money supply increases _ there is a drop in money balances held _ interest rates increase _ planned investment spending decreases _ aggregate demand increases.
d. increase in money supply _ increase in money balances held _ decrease in interest rates _ decrease in planned investment spending _ increase in aggregate demand.