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Use the Figure Below to Answer the Following Question(s)

Question 16

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Use the figure below to answer the following question(s) . Figure 15-1
Use the figure below to answer the following question(s) . Figure 15-1 In Figure 15-1, AD<sub>1</sub> and SRAS<sub>1</sub> indicate initial conditions in the goods and services market. In the short run, which of the following will most likely result from a shift to a more expansionary monetary policy under the rational expectations hypothesis? A) price level P<sub>1</sub> and output Y<sub>1</sub> B) price level P<sub>2</sub> and output Y<sub>2</sub> C) price level P<sub>3</sub> and output Y<sub>1</sub> D) price level P<sub>1</sub> and output Y<sub>2</sub> In Figure 15-1, AD1 and SRAS1 indicate initial conditions in the goods and services market. In the short run, which of the following will most likely result from a shift to a more expansionary monetary policy under the rational expectations hypothesis?


A) price level P1 and output Y1
B) price level P2 and output Y2
C) price level P3 and output Y1
D) price level P1 and output Y2

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