Figure 17-2
-Refer to Figure 17-2. Suppose the economy is initially at point c. If the money supply increases, where does the economy move to in the short-run?

Question

Figure 17-2 
-Refer to Figure 17-2. Suppose the economy is initially at point c. If the money supply increases, where does the economy move to in the short-run?

Quizplus · Accepted Answer

An increase in the money supply shifts the AD curve to the right. Starting from point c, this means that output and prices will increase, moving the economy to point d in the short-run.

Figure 17-2 -Refer to Figure 17-2. Suppose the Economy Is Initially at Is