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Solution:
(c) Interest rates to fall, investment spending to rise, and aggregate demand to rise.
An increase in the money supply typically leads to a decrease in interest rates, as the increase in the supply of money makes it easier and cheaper for people and businesses to borrow. Lower interest rates, in turn, tend to stimulate investment spending, as businesses find it cheaper to finance new projects and investments.
Additionally, the increase in the money supply can lead to an increase in consumer spending, as people have more money to spend on goods and services, which can contribute to an increase in aggregate demand.
Therefore, the most probable outcome of an increase in the money supply is interest rates to fall, investment spending to rise, and aggregate demand to rise.
Correct option is (c)