-Refer to the above graph, which shows the supply and demand for money where D_m₁, D_m₂, and D_m₃ represent different demands for money and S_m₁, S_m₂, and S_m₃ represent different levels of the money supply. The initial equilibrium point is A. What will be the new equilibrium point following an increase in the money supply?

Question

-Refer to the above graph, which shows the supply and demand for money where D<sub>m</sub><sub>1</sub>, D<sub>m</sub><sub>2</sub>, and D<sub>m</sub><sub>3</sub> represent different demands for money and S<sub>m</sub><sub>1</sub>, S<sub>m</sub><sub>2</sub>, and S<sub>m</sub><sub>3</sub> represent different levels of the money supply. The initial equilibrium point is A. What will be the new equilibrium point following an increase in the money supply? A) C. B) D. C) G. D) H.

Quizplus · Accepted Answer

An increase in the money supply shifts the supply curve to the right, leading to a new equilibrium at point G where the new supply curve intersects the original demand curve.

-Refer to the Above Graph, Which Shows the Supply and Demand