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I know it's right to say The police are pursuing the criminal.

But is it right to say The family are short on money?
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Family is a singular noun, so it's "The family is short on money."

Families is the plural form.
American: The family is ...
British: is or are

CJ
Teachers: We supply a list of EFL job vacancies
Police and People are always plural.

Family can be singular or plural depending on the meaning.

When you want to refer each and every member in the family then it can be plural or else it is singular.

There are, further, so called collective nouns, which are singular when we think of them as groups and plural when we think of the individuals acting within the whole (which happens sometimes, but not often).

audience
band
class
committee
crowd
dozen
family
flock
group
heap
herd
jury
kind
lot
[the] number
public
staff
team
These are some of the collective nouns which can be either singular or plural.