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Figure: Monetary Policy and Aggregate Demand Reference: Ref 15-4

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Figure: Monetary Policy and Aggregate Demand Figure: Monetary Policy and Aggregate Demand   Reference: Ref 15-4 (Figure: Monetary Policy and Aggregate Demand) Using the figure, begin at Point a in this economy. Now suppose that due to an inflationary atmosphere, the Fed decides to decrease spending growth by 2 percent. What would you expect would happen in the short run and why? Reference: Ref 15-4 (Figure: Monetary Policy and Aggregate Demand) Using the figure, begin at Point a in this economy. Now suppose that due to an inflationary atmosphere, the Fed decides to decrease spending growth by 2 percent. What would you expect would happen in the short run and why?

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