Use the Figure Below to Answer the Following Question(s)

question 20

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 15-1

-In Figure 15-1,AD₁ and SRAS₁ indicate initial conditions in the goods and services market.In the short run,which of the following will most likely result from a shift to a more expansionary monetary policy under the rational expectations hypothesis?

• A)price level P₁ and output Y₁
• B)price level P₂ and output Y₂
• C)price level P₃ and output Y₁
• D)price level P₁ and output Y₂

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