Refer to the following figure to answer the next three questions:

-According to the figure,if the policy is fully expected,expansionary monetary policy will cause an economy initially in full-employment equilibrium to see its price level:
A) increase from P₁ to P₃.
B) increase from P₁ to P₂.
C) initially increase from P₁ to P₂ and over time increase to P₃.
D) decrease from P₃ to P₂.
E) decrease from P₃ to P₁.
Correct Answer:
Verified
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