Refer to the Information Provided in Figure 32

question 30

Multiple Choice

Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2
-Refer to Figure 32.2. According to monetarists, an expansionary fiscal policy in the long run and after all the adjustments have been made

• A) does not increase equilibrium output or the price level.
• B) increases equilibrium output above Y₁, but does not change the price level.
• C) increases the price level above P₁, but does not change equilibrium output.
• D) increases equilibrium output above Y₁ and decreases the price level below P₁.

---

Definitions:

Presentation Currency

The form of money used to express the financial records of a company.

Net Profit

The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.

Monetary Items

Assets and liabilities that are to be received or paid in a fixed or determinable amount of money.

Payables

Amounts that a company owes to its creditors or suppliers for goods or services received.