Suppose the economy is initially in long-run equilibrium. The Fed decides to sell bondssell bonds. In the short-run, this contractionary monetary policy will cause: A. A shift from SRAS 1SRAS1 to SRAS 2SRAS2 and a movement to point A, with a higher price level and the same output. B. A shift from AD 2AD2 to AD 1AD1 and a movement to point D, with a lower price level and lower output. C. A shift from AD 1AD1 to AD 2AD2 and a movement to point B, with a higher price level and higher output. D. A shift from SRAS 2SRAS2 to SRAS 1SRAS1 and a movement to point B, with a lower price level and higher output.
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Suppose the economy is initially in long-run equilibrium. The Fed decides to sell bondssell bonds. I...
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