Figure 16-2
-Refer to the Figure 16-2.If the economy starts at c and the money supply growth rate increases,where does the economy move to in the long run?
A) b
B) d
C) e
D) a

Question

Figure 16-2 
-Refer to the Figure 16-2.If the economy starts at c and the money supply growth rate increases,where does the economy move to in the long run?
A) b 
B) d 
C) e 
D) a

Quizplus · Accepted Answer

In the long run, an increase in the money supply growth rate typically leads to higher inflation, moving the economy to a higher price level, such as point e.

Figure 16-2 -Refer to the Figure 16-2.If the Economy Starts at C