Figure 22-6 Use the Two Graphs in the Diagram to Answer the Answer

question 254

Multiple Choice

Figure 22-6
Use the two graphs in the diagram to answer the following questions.
-Refer to Figure 22-6. Starting from C and 3, in the short run an unexpected increase in money supply growth moves the economy to

• A)A and 1.
• B)B and 2.
• C)back to C and 3.
• D)D and 4.

---

Definitions:

Externality

A cost or benefit arising from an economic activity that affects third parties who did not choose to incur that cost or benefit.

National Defense

The government activities, plans, and policies aimed at protecting a country's territory and citizens from external threats and maintaining overall security.

Externalities

Fiscal aftereffects that influence neutral individuals, having either favorable or adverse effects.

Cost

An amount that must be paid or spent to buy or obtain something, covering expenses such as manufacturing, labor, or materials.