Multiple Choice
Refer to the graph shown. Suppose the economy is initially at A but then the Fed adopts a contractionary monetary policy. Using the standard AS/AD model reasoning, this policy will cause the economy to move to: 
A) B in the short run and the long run.
B) A in the short run and the long run.
C) C in the short run and A in the long run.
D) C in the short run and E in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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