Question: Suppose the economy in Exhibit 10 is at point E1, and the Fed increases the money supply. If people have adaptive expectations, then the economy

Suppose the economy in Exhibit 10 is at point E1, and the Fed increases the money supply. If people have adaptive expectations, then the economy will move

a. to point A in the short run and point B in the long run.

b. directly to point B.

c. to point C in the short run and point D in the long run.

d. directly to point D.

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