Refer to the Following Figure to Answer the Following Questions

question 156

Multiple Choice

Refer to the following figure to answer the following questions.
-According to the figure,if an expansionary monetary policy is fully expected,that policy will cause an economy initially in full-employment equilibrium to see its price level

• A) increase from P₁ to P₃.
• B) increase from P₁ to P₂.
• C) initially increase from P₁ to P₂ and over time increase to P₃.
• D) decrease from P₃ to P₂.
• E) decrease from P₃ to P₁.

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