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

Question

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

Quizplus · Accepted Answer

A decrease in money supply growth will lead to lower inflation and potentially lower output in the short run, moving the economy from c and 3 to a and 1 in the long run, where inflation and output stabilize at lower levels.

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