Use the following to answer questions: 
-(Figure: Short-Run Determination of the Interest Rate) Refer to Figure: Short-Run Determination of the Interest Rate.If the money supply is at MS1 and the Bank of Canada conducts expansionary monetary policy,in the short run the interest rate drops to i2.In the long run,prices will _____,thereby ___________the demand for money.
Definitions:
Acreage Allotments
Regulatory measures that limit the amount of land that can be used for farming certain crops to control supply and stabilize market prices.
Price Supports
Government interventions to maintain the market price of a commodity at a certain level to encourage production and protect farmers.
Farm-Family Income
The combined income of all members of a family who reside on a farm, from both farming and non-farming sources.
European Union
A political and economic union of 27 member states that are located primarily in Europe, aiming to ensure peace, stability, and economic cooperation among its members.
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