Figure 15.3 -Refer to Figure 15.3 If This Economy Is Initially in Economy

Multiple Choice

Figure 15.3

-Refer to Figure 15.3 If this economy is initially in a recession, the change in price level which would bring the economy back to full employment would also change the money demand. The change in money demand will change interest rates, which is reflected by the movement from

A) yF to y₀.
B) r₀ to r₁.
C) AS₁ to AS₀.
D) I₁ to I₀.