Figure 11-6 -Refer to Figure 11-6. Suppose the Economy Is Operating at Is

Multiple Choice

Figure 11-6
-Refer to Figure 11-6. Suppose the economy is operating at point a. Some people observe that an expansionary monetary policy will increase the money supply and ultimately drive the price level to the equilibrium at

A) d. They rationally adjust their behavior, bypassing the short-run equilibrium at c.
B) d. They rationally adjust their behavior, bypassing the short-run equilibrium at b
C) b. They rationally adjust their behavior, bypassing the long-run equilibrium at d
D) a . They rationally adjust their behavior, bypassing the short-run equilibrium at b