Use the Following to Answer Questions

question 69

Multiple Choice

Use the following to answer questions:
-(Figure: Classical Model of the Price Level) Refer to Figure: Classical Model of the Price Level. If the central bank increases the money supply such that aggregate demand shifts from AD₁ to AD₂, according to this classical model, the equilibrium point will:

• A) not change.
• B) immediately move from E₁ to E₂.
• C) immediately move from E₂ to E₁.
• D) immediately move from E₁ to E₃.

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