Figure 22-5
Use the graph below to answer the following questions.
-Refer to Figure 22-5. If the economy starts at C and the money supply growth rate increases, then in the short run the economy moves to
A)B.
B)D.
C)F.
D)None of the above is consistent with an increase in the money supply growth rate.

Question

Figure 22-5
Use the graph below to answer the following questions. 
-Refer to Figure 22-5. If the economy starts at C and the money supply growth rate increases, then in the short run the economy moves to
A)B. 
B)D. 
C)F. 
D)None of the above is consistent with an increase in the money supply growth rate.

Quizplus · Accepted Answer

According to the graph, an increase in the money supply growth rate would cause an increase in aggregate demand, shifting the AD curve to the right. This would result in a short-run equilibrium at a higher price level and higher real GDP, indicated by point B on the graph.

Figure 22-5 Use the Graph Below to Answer the Following Questions