Use the Following to Answer Questions 50-54

Multiple Choice

Use the following to answer questions 50-54:
Figure: Monetary Policy and Demand Shocks
-(Figure: Monetary Policy and Demand Shocks) Refer to the figure.In the figure,assume the initial real growth rate of the economy is 3% when a positive aggregate demand shock shifts the AD curve from AD₁ to AD₄.The correct monetary policy response is to:

A) reduce money supply growth,so that the AD curve shifts back to AD₁.
B) reduce money supply growth,so that the AD curve remains at AD₄.
C) increase money supply growth,so that the AD curve shifts to AD₃.
D) increase money supply growth,so that the AD curve shifts to AD₅.