Use the figure below to answer the following questions.

Figure 28.3.1
-Refer to Figure 28.3.1.Suppose the economy moves from point D to point B.According to the monetarist theory of the business cycle,what could have caused this movement?

Question

Use the figure below to answer the following questions.
  
Figure 28.3.1
-Refer to Figure 28.3.1.Suppose the economy moves from point D to point B.According to the monetarist theory of the business cycle,what could have caused this movement?

Quizplus · Accepted Answer

According to the monetarist theory, changes in the money supply are the primary cause of fluctuations in output and employment in the short run. Moving from point D to point B suggests an increase in aggregate demand, which could be caused by an increase in the growth rate of the quantity of money.

Use the Figure Below to Answer the Following Questions