Exhibit 16.3

-Refer to Exhibit 16.3. An expansionary monetary policy increases the aggregate demand curve to _____, stimulates output and employment in the short run to equilibrium point _____, with output at _____.
A) AD, a, Q
B) AD, a, Q'
C) AD, c, Q
D) AD, b, Q
E) AD', b, Q'

Question

Exhibit 16.3
 
-Refer to Exhibit 16.3. An expansionary monetary policy increases the aggregate demand curve to _____, stimulates output and employment in the short run to equilibrium point _____, with output at _____.
A) AD, a, Q 
B) AD, a, Q' 
C) AD, c, Q 
D) AD, b, Q 
E) AD', b, Q'

Quizplus · Accepted Answer

An expansionary monetary policy shifts the aggregate demand curve to the right, from AD to AD', moving the equilibrium point to b, where the output is increased to Q'.

Exhibit 16.3 -Refer to Exhibit 16.3. an Expansionary Monetary Policy Increases the Monetary