Figure 16-3
-Refer to Figure 16-3. Starting from c and 3, in the long run, where does an increase in money supply growth move the economy to?
A)a and 1
B)back to c and 3
C)d and 4
D)e and 5

Question

Figure 16-3 
-Refer to Figure 16-3. Starting from c and 3, in the long run, where does an increase in money supply growth move the economy to?
A)a and 1 
B)back to c and 3 
C)d and 4 
D)e and 5

Quizplus · Accepted Answer

An increase in money supply growth shifts the AD curve to the right, leading to an increase in real GDP and an increase in the price level. This moves the economy from point c and 3 to point e and 5, which represents a higher level of output and a higher price level.

Figure 16-3 -Refer to Figure 16-3. Starting from C and 3, in and 3