Figure 104

-Refer to Figure 10 $\hat{Y}$ ₁,And Real GDP Increases So the Output Gap Increases To Equilibrium

Multiple Choice

Figure 10.4

-Refer to Figure 10.4..Suppose the economy's equilibrium starts out with an output gap of $\hat{Y}$ ₁,and real GDP increases so the output gap increases to $\hat{Y}$ ₂.If the Bank of Canada wants to keep the interest rate at the target,the money demand curve will ________ and the money supply curve will ________.

A) shift from MD₁ to MD₂; shift from MS₁ to MS₂
B) shift from MD₂ to MD₁; shift from MS₂ to MS₁
C) remain at MD₁; remain at MS₁
D) remain at MD₂; remain at MS₂