Figure 26-7 -Refer to Figure 26-7. Suppose the Fed Sells Treasury Bills

question 96

Multiple Choice

Figure 26-7
-Refer to Figure 26-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the basic AD-AS model in the figure above, this situation would be depicted as a movement from

• A) A to B.
• B) B to D.
• C) C to B.
• D) B to C.
• E) C to D.

---

Definitions:

Incremental

Pertaining to an increase or addition, especially in a series of small, regular steps.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Amortization

The process of spreading out a loan into a series of fixed payments over time, covering both principal and interest.

Pure Endowment

An insurance policy where the insurer agrees to pay a specified sum of money at the end of a determined period on the condition that the insured is still alive.