Use the following to answer questions:
Figure: Monetary Policy and the AD-SRAS Model
-(Figure: Monetary Policy and the AD-SRAS Model) Refer to Figure: Monetary Policy and the AD-SRAS Model. The economy may move from point i to point h as a result of:
A) an increase in the money supply.
B) a rise in the discount rate.
C) a decrease in the money supply.
D) sales of government securities in the open market.

Question

Use the following to answer questions:
Figure: Monetary Policy and the AD-SRAS Model 
-(Figure: Monetary Policy and the AD-SRAS Model) Refer to Figure: Monetary Policy and the AD-SRAS Model. The economy may move from point i to point h as a result of:
A) an increase in the money supply. 
B) a rise in the discount rate. 
C) a decrease in the money supply. 
D) sales of government securities in the open market.

Quizplus · Accepted Answer

An increase in the money supply typically shifts the aggregate demand curve to the right, moving the economy from a lower output and price level (point i) to a higher output and price level (point h).

Use the Following to Answer Questions