Figure 35-7
Use the two graphs in the diagram to answer the following questions.
-Refer to Figure 35-7.The economy would move from 3 to 5
A)in the short run if money supply growth increased unexpectedly.
B)in the short run if money supply growth decreased unexpectedly.
C)in the long run if money supply growth increases.
D)in the long run if money supply growth decreases.

Question

Figure 35-7
Use the two graphs in the diagram to answer the following questions. 
-Refer to Figure 35-7.The economy would move from 3 to 5
A)in the short run if money supply growth increased unexpectedly. 
B)in the short run if money supply growth decreased unexpectedly. 
C)in the long run if money supply growth increases. 
D)in the long run if money supply growth decreases.

Quizplus · Accepted Answer

In the long run, an increase in money supply growth will lead to an increase in aggregate demand, shifting the AD curve to the right and moving the economy from point 3 to point 5.

Figure 35-7 Use the Two Graphs in the Diagram to Answer the Answer