Figure 31-6: Monetary Policy 11 Y, r: r, In] MP 16. Use the " Monetary Policy ll" Figure 31-6 . Starting from short-run equilibrium at Y2, sound central bank policy would be: Figure 31-7: Monetary Policy 111 w m I I! SIMS LRAS '4 \"I \"a '- AD v. V'V. n-m It.\" m 17. Use the " Monetary Policy 111" Figure 31-7. The economy is in short-run equilibrium. Sound monetary policy will lead to an equilibrium GDP of: Figure 31-8: Monetary Policy and the AD-SRAS Model 18. Use the " Monetary Policy and the AD-SRAS Model" Figure 31-8 . The economy is liltely to move from point i to point h due to: 19. Consider an economy that is currently facing a recessionary gap. The Federal Reserve decides to use expansionary monetary policy to close that gap. As a result of this policy, in the short run: 20. If the Federal Reserve conducts an open market purchase, one can expect