38. Refer to Figure 6. A decrease in Y from Y1 to Y2 is explained as follows:
(A) The Federal Reserve increases the money supply, causing the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2.
(B) An increase in P from P1 to P2 causes the money-demand curve to shift from MD 1 to MD2; this shift of MD causes r to increase from ri to re; and this increase in r causes Y to decrease from Y1 to Y2.
(C) A decrease in P from P2 to P1 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r1 to r2 increase from ri to re; and this increase in r causes Y to decrease from Y1 to Y2.
(D) An increase in the price level causes the money-demand curve to shift from MD2 to MD 1; this shift of MD causes r to decrease from r2 to r1; and this decrease in r causes Y to decrease from Y1 to Y2.

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