Final answer:
An increase in the money supply typically leads to lower interest rates, raises investment levels, increases aggregate demand, and raises equilibrium income; it does not decrease aggregate supply.
Step-by-step explanation:
An increase in the money supply does all of the following except decrease aggregate supply. In economics, when there is an increase in the money supply, interest rates tend to lower because banks have more money to lend. This in turn can raise the level of investment as borrowing becomes cheaper, which also increases aggregate demand as consumers have more money to spend.
Additionally, due to a higher level of spending and investment, equilibrium income in the economy may rise. However, an increase in the money supply does not decrease aggregate supply; in fact, it could potentially increase it if companies invest more in their productive capacities due to lower borrowing costs.