Figure 17-3
-Refer to Figure 17-3. Starting from c and 3, in the long run, where does a decrease in money supply growth move the economy to?
A) a and 1
B) e and 5
C) d and 4
D) e and 5.

Question

Figure 17-3 
-Refer to Figure 17-3. Starting from c and 3, in the long run, where does a decrease in money supply growth move the economy to?
A) a and 1 
B) e and 5 
C) d and 4 
D) e and 5.

Quizplus · Accepted Answer

A decrease in money supply growth will lead to lower inflation and, in the long run, the economy will move to a lower inflation rate and a lower output level, which corresponds to point a and 1.

Figure 17-3 -Refer to Figure 17-3. Starting from C and 3, in and 3