Exhibit 16-4 Aggregate Demand and Supply Model in Exhibit

question 68

Multiple Choice

Exhibit 16-4 Aggregate demand and supply model In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD₃ to AD₂?

• A)Lower the discount rate.
• B)Lower the federal funds rate
• C)Raise the federal funds rate.
• D)Raise the legal reserve requirement
• E)Buy government securities.

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