Figure 17-3 -In Figure 17-3 Above,suppose We Are Working Under the Assumption

Multiple Choice

Figure 17-3

-In Figure 17-3 above,suppose we are working under the assumption of the Lucas model.The Fed has been following an announced policy of "zero money growth for an indefinite period." Suddenly and without warning it produces positive money growth and a "money surprise." This would result in a movement between points

A) A and C.
B) A and B.
C) D and B.
D) D and A.
E) A and D.