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Figure 21-2

question 411

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Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.   -Refer to Figure 21-2. Assume the money market is always in equilibrium. Under the assumptions of the model, A) the quantity of goods and services demanded is higher at P<sub>2</sub> than it is at P<sub>1</sub>. B) the quantity of money is higher at Y<sub>1</sub> than it is at Y<sub>2</sub>. C) an increase in r from r<sub>1</sub> to r<sub>2</sub> is associated with a decrease in Y from Y<sub>1</sub> to Y<sub>2</sub>. D) All of the above are correct.
-Refer to Figure 21-2. Assume the money market is always in equilibrium. Under the assumptions of the model,


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