Use the figure below for the following questions.
Figure 30-1

-Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,the graph shows that

Question

Use the figure below for the following questions.
Figure 30-1
 
-Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,the graph shows that

Quizplus · Accepted Answer

The shift from MS₁ to MS₂ indicates an increase in the money supply, which will lead to an increase in aggregate demand. As a result, the equilibrium price level will increase. Choice A and B are incorrect because there is no information given in the graph to suggest a change in the demand for goods and services or the economy's ability to produce goods and services. Choice D is incorrect because the equilibrium value of money is not directly affected by a shift in the money supply curve.

Use the Figure Below for the Following Questions