Figure 28-1 -Refer to Figure 28-1. Suppose That the Economy Is Currently

question 78

Multiple Choice

Figure 28-1
-Refer to Figure 28-1. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run?

• A) Buy treasury bills.
• B) Sell treasury bills.
• C) Lower the discount rate.
• D) Increase the money supply.
• E) No policy by the Federal Reserve will move the economy to point C in the long run.

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