Homework answers / question archive / By drawing two diagrams (1) Money market diagram (X -axis is M money stock and Y- axis is 1/P (price level) and (2) Short-run Aggregate Demand and supply curve like Chapter 23 Figure 7 (X axis is Y (Real GDP) and Y-axis is P (price Level), explain how increase in money by Fed affects equilibrium level of real GDP and aggregate price level after choosing one answer from below:______________________________ (1) Both P and Y increases (2) Both P and Y decreases (3) P increases but Y decreases (4) P decreases but Y increases   Diagram (1)                                   Diagram (2) 

By drawing two diagrams (1) Money market diagram (X -axis is M money stock and Y- axis is 1/P (price level) and (2) Short-run Aggregate Demand and supply curve like Chapter 23 Figure 7 (X axis is Y (Real GDP) and Y-axis is P (price Level), explain how increase in money by Fed affects equilibrium level of real GDP and aggregate price level after choosing one answer from below:______________________________ (1) Both P and Y increases (2) Both P and Y decreases (3) P increases but Y decreases (4) P decreases but Y increases   Diagram (1)                                   Diagram (2) 

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By drawing two diagrams (1) Money market diagram (X -axis is M money stock and Y- axis is 1/P (price level) and (2) Short-run Aggregate Demand and supply curve like Chapter 23 Figure 7 (X axis is Y (Real GDP) and Y-axis is P (price Level), explain how increase in money by Fed affects equilibrium level of real GDP and aggregate price level after choosing one answer from below:______________________________

(1) Both P and Y increases

(2) Both P and Y decreases

(3) P increases but Y decreases

(4) P decreases but Y increases

 

Diagram (1)                                   Diagram (2)