The Keynesian transmission mechanism for monetary policy asserts that changes in the money supply
◦ affect the price level, which affects the IS curve.
◦ affect the price level, which affects the level of aggregate demand.
◦ affect real interest rates, which affect the level of aggregate demand.
◦ affect real interest rates, which affect the level of aggregate supply.
◦ affect the price level, which affects the level of aggregate supply.