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 decreases,in the short run the economy moves to
A)B.
B)C.
C)F.
D)None of the above is consistent with a decrease 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 decreases,in the short run the economy moves to
A)B. 
B)C. 
C)F. 
D)None of the above is consistent with a decrease in the money supply growth rate.

Quizplus · Accepted Answer

If the money supply growth rate decreases, it would lead to a decrease in aggregate demand, shifting the AD curve leftward. The intersection of the new AD and SRAS curve occurs at point B, indicating a decrease in both price level and output. Therefore, the economy would move from C to B in the short run.

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