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Business, 03.07.2019 02:00 Anonymouslizard

1. suppose the federal reserve increases the money supply by 5 percent. assume the velocity of money is constant. a. what happens to the aggregate demand curve? an increase in money supply would shift the aggregate demand curve out (increase). b. what happens to the level of output and the price level in the short run and in the long run. be sure to tell the story of why the economy adjusts. in other words, how do people change their behavior in response to the change in the money supply?

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