Suppose the economy is initially in long-run equilibrium. The Fed enacts a policy to decrease the discount ratedecrease the discount rate. In the short-run, this expansionary monetary policy will cause:A. A shift from AD 1AD1 to AD 2AD2 and a movement to point B, with a higher price level and higher output.

B. A shift from SRAS 2SRAS2 to SRAS 1SRAS1 and a movement to point D, with a higher price level and lower output.

C. A shift from AD 2AD2 to AD 1AD1 and a movement to point C, with a lower price level and the same output.

D. A shift from SRAS 1SRAS1 to SRAS 2SRAS2 and a movement to point B, with a lower price level and higher output.

Ibelieve your answer is d

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