-In the above figure, suppose the economy starts at point A. The short-run response to an increase in the growth rate of the quantity of money in monetarist business cycle theory moves the economy to point
A) B.
B) D.
C) C.
D) E.

Question

-In the above figure, suppose the economy starts at point A. The short-run response to an increase in the growth rate of the quantity of money in monetarist business cycle theory moves the economy to point
A) B. 
B) D. 
C) C. 
D) E.

Quizplus · Accepted Answer

In monetarist business cycle theory, an increase in the growth rate of the quantity of money initially leads to higher aggregate demand, moving the economy from point A to point B in the short run.

-In the Above Figure, Suppose the Economy Starts at Point