Figure 30-1
-Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,

Question

Figure 30-1 -Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,

Quizplus · Accepted Answer

When the money supply curve shifts to the right, the equilibrium level of money increases causing the equilibrium price level to increase as well. Therefore, C is the best choice. A and B are incorrect because the shift in the money supply curve does not directly affect the demand for goods and services or the economy's ability to produce them. D is incorrect because the equilibrium value of money decreases as the money supply increases.

Figure 30-1 -Refer to Figure 30-1.When the Money Supply Curve Shifts from Curve