Figure 17-2
Use the pair of diagrams below to answer the following questions.

-Refer to Figure 17-2. If the economy starts at C and 1, then in the short run, an increase in the money supply growth rate moves the economy to

Question

Figure 17-2
Use the pair of diagrams below to answer the following questions.
 
-Refer to Figure 17-2. If the economy starts at C and 1, then in the short run, an increase in the money supply growth rate moves the economy to

Quizplus · Accepted Answer

An increase in money supply growth rate shifts the LM curve to the right, reducing the interest rates and increasing output. As a result, the economy would move to point B and 2 in the short run.

Figure 17-2 Use the Pair of Diagrams Below to Answer the Following