Figure 22-2
Use the pair of diagrams below to answer the following questions.
-Refer to Figure 22-2. If the economy starts at C and 1, then in the short run, an increase in the money supply growth rate moves the economy to
A)A and 1
B)B and 2
C)C and 3
D)None of the above is correct.

Question

Figure 22-2
Use the pair of diagrams below to answer the following questions. 
-Refer to Figure 22-2. If the economy starts at C and 1, then in the short run, an increase in the money supply growth rate moves the economy to
A)A and 1 
B)B and 2 
C)C and 3 
D)None of the above is correct.

Quizplus · Accepted Answer

An increase in the money supply growth rate typically leads to higher inflation and lower unemployment in the short run, moving the economy from point C and 1 to point B and 2 on the Phillips curve.

Figure 22-2 Use the Pair of Diagrams Below to Answer the Following