-Refer to the Above Figure

question 72

Multiple Choice

-Refer to the above figure. The economy initially is at point A. The Fed unexpectedly increases the money supply. Which of the following statements are TRUE?

• A) In the short run, the economy will move from point A to point C. In the long run, the economy will move to point B.
• B) In the short run, the economy will move from point A to point C. In the long run, the economy will move back to point A.
• C) In the short run, the economy will move from point A to point B. In the long run, the economy will stay at point B.
• D) In the short run, the economy will move from point A to point B. In the long run, the economy will move back to point A.

---

Definitions:

Economic Losses

Financial losses incurred by businesses or the economy as a whole, often as a result of unfavorable market conditions.

Oligopolists

Companies or entities that dominate a particular market, where a few businesses hold significant market share, potentially affecting prices and competition.

Cartel Members

Companies or countries that agree to control production and prices, often to limit competition and maximize collective profits.

Collusive Agreements

Secret or illegal cooperation or conspiracy, especially between competing entities, to cheat or deceive others.