Refer to the information provided in Figure 17.2 below to answer the questions that follow. Figure 17.2 -Refer to Figure 17.2. According to ________, a(n) ________ monetary policy in the short run and after all the adjustments have been made increases equilibrium output above Y₁. A) Keynes; contractionary B) Keynes; expansionary C) the new classicals; contractionary D) the new classicals; expansionary

Question

Quizplus · Accepted Answer

According to Figure 17.2, an expansionary monetary policy shifts the AD1 curve to the right, increasing equilibrium output above Y₁ in the short run and after all adjustments have been made. This aligns with Keynesian economics, making option B the correct answer.

Refer to the Information Provided in Figure 17