Figure 35-6
Use the graph below to answer the following questions.
-Refer to Figure 35-6.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 35-6
Use the graph below to answer the following questions. 
-Refer to Figure 35-6.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

An increase in the money supply growth rate would shift the aggregate demand curve to the right, leading to higher output (real GDP) and prices in the short run. This movement is represented by the shift from point C to point D on the graph. Therefore, the correct choice is B.

Figure 35-6 Use the Graph Below to Answer the Following Questions