Suppose that increases in the money supply lead to a rise in stock prices. Does this mean that when you see the money supply has sharply increased in the past week, you should go out and buy stocks? Why or why not?

No

Explanation:

The information regarding stock prices is public information, so in that regard, a person should not buy stocks after an increase in the money supply because that rise in stock prices is already incorporated. As the stock market is an important part of the financial sector, that is why all the information is incorporated to defy misconduct and inside information.