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Use the graph to answer the question that follows. A graph has Quantity of money along the horizontal axis and Nominal interest rate along the
Use the graph to answer the question that follows. A graph has Quantity of money along the horizontal axis and Nominal interest rate along the vertical axis. Two vertical lines with label M S 1 and M S 2 are drawn perpendicular to the horizontal axis such that the line M S 1 lies to the left of M S 2. Three curves labeled M D 2, M D, and M D 1 decreases from left to right passing through two lines M S 1 and M S 2 such that the curve M D 2 lies below the curve M D and the curve M D 1 lies above the curve M D. The curve M D 1 intersects the lines M S 1 and M S 2 at points A and D respectively. The curve M D intersects the line M S 1, M S 2 at points B and F respectively. The curve M D 2 intersects the lines M S 1 and M S 2 at points C and E respectively. Assuming that the initial money market equilibrium is at point B, how will an increase in the general price level affect this equilibrium? (2 points)
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