1.5.1 The economy of Mayberry is currently in equilibrium at point A on the graph. Prince Barney of Mayberry has decided that he wants the economy to grow and has ordered the Royal Central Bank of Mayberry to print more currency so banks can expand their loans to stimulate growth. Explain what will most likely happen to the economy of Mayberry as a result of Prince Barney’s actions and show the result on the graph

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Price level, P Po 0 Yo Aggregate output (income), Y AS (Long run) AS (Short run) AD