-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) C.
C) D.
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) C. 
C) D. 
D) E.

Quizplus · Accepted Answer

The monetarist business cycle theory states that an increase in the growth rate of the quantity of money will lead to an increase in aggregate demand, which will in turn lead to an increase in output and employment. This is represented by the movement from point A to point B in the diagram.

-In the Above Figure,suppose the Economy Starts at Point A Short-Run