-Refer to Exhibit 15-l.A Keynesian monetary policy to eliminate a recessionary gap can be portrayed as a move between points
A) A and B.
B) B and C.
C) C and D.
D) D and A.

Question

-Refer to Exhibit 15-l.A Keynesian monetary policy to eliminate a recessionary gap can be portrayed as a move between points
A) A and B. 
B) B and C. 
C) C and D. 
D) D and A.

Quizplus · Accepted Answer

A Keynesian monetary policy to eliminate a recessionary gap involves increasing the money supply to lower interest rates and stimulate investment and consumption. This would shift the economy from a lower output level (point B) to a higher output level (point C) on the aggregate demand curve.

-Refer to Exhibit 15-L