Graph 11-1 -When the money supply curve in Graph11-1 shifts from MS₂ to MS₁: A)the equilibrium price level increases B)this may be due to the RBA selling government securities C)this is due to the RBA buying government securities D)the demand for goods and services increasing

Question

Quizplus · Accepted Answer

When the money supply curve shifts from MS2 to MS1, it indicates a decrease in the money supply. This can occur when the Reserve Bank of Australia (RBA) sells government securities, which reduces the amount of money in circulation.

Graph 11-1 -When the Money Supply Curve in Graph11-1 Shifts from MS2

Graph 11-1 -When the Money Supply Curve in Graph11-1 Shifts from MS₂