Figure 17-1
-Refer to Figure 17-1. If the economy starts at c and 1, then in the short run, where does an increase in the money supply move the economy?

Question

Figure 17-1 
-Refer to Figure 17-1. If the economy starts at c and 1, then in the short run, where does an increase in the money supply move the economy?

Quizplus · Accepted Answer

An increase in the money supply typically shifts the aggregate demand curve to the right, moving the economy from point c and 1 to a higher output level and price level, such as point b and 2 in the short run.

Figure 17-1 -Refer to Figure 17-1. If the Economy Starts at C