Figure 16-1
-Refer to Figure 16-1. If the economy starts at c and 1, then in the short run, a decrease in the money supply growth rate moves the economy to where?

Question

Figure 16-1 
-Refer to Figure 16-1. If the economy starts at c and 1, then in the short run, a decrease in the money supply growth rate moves the economy to where?

Quizplus · Accepted Answer

A decrease in the money supply growth rate will shift the AD curve to the left, leading to a lower output level and higher price level. The new equilibrium point will be at point d and 3.

Figure 16-1 -Refer to Figure 16-1. If the Economy Starts at C