Value of Money MS, MS, 2 A.........mmm... Money 1 Demand C D Quantity of Money If the current Money Supply is located at MS, and the value of money is 2, what is the excess demand or supply? 3 Oo OIn the following diagram, how would an increase in the Money Supply move the economy in the short and long run? Price Level A Quantity of Output O from C to D in the short run and back to C in the long run O from C to B in the short run and the long run O from C to D in the short run and the long run O from C to B in the short run and to A in the long runThe economy is in longrun equilibrium. Suddenly, due to corporate scandals, a recession experienced by a major trading partner= and the loss of condence among policymakers, citizens become pessimistic concerning the future. They maintain this level ofpessimism for a long time. Which statement is consistent with the aggregate demand and aggregate supply theory? 0 The expected price level rises. Bargains are struck for lower increases in wages. O The expected price level rises. Bargains are struck for higher increases in wages. O The expected price level falls. Bargains are struck for lower increases in wages. O The expected price level falls. Bargains are stuck for higher increases inwages