When the Fed Changes Monetary Policy to Reduce the Rate

question 20

Multiple Choice

When the Fed changes monetary policy to reduce the rate of inflation, which of the following should occur in the medium run?

• A)The AD curve should shift to the right.
• B)The IA line should shift down.
• C)The AD curve should shift to the left.
• D)The IA line should shift up.
• E)The aggregate expenditure line should shift down.

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