Use the following to answer questions:
Figure: Economic Adjustments
-(Figure: Economic Adjustments) Refer to Figure: Economic Adjustments. Assume that the economy is at point c. The effect of an increase in the money supply is represented by a shift of the _____ curve to _____.

Question

Use the following to answer questions:
Figure: Economic Adjustments 
-(Figure: Economic Adjustments) Refer to Figure: Economic Adjustments. Assume that the economy is at point c. The effect of an increase in the money supply is represented by a shift of the _____ curve to _____.

Quizplus · Accepted Answer

An increase in the money supply typically leads to an increase in aggregate demand, hence the Aggregate Demand (AD) curve shifts to the right.

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