Exhibit 20-4  Aggregate Demand and Supply Model in Exhibit 20-4

question 188

Multiple Choice

Exhibit 20-4  Aggregate demand and supply model In Exhibit 20-4, which one of the following actions could the Fed use to shift the AD curve from AD₃ to AD₂?

• A) Lower the legal reserve requirement.
• B) Lower the discount rate.
• C) Lower the federal funds rate.
• D) Sell government securities.
• E) Print currency.

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Definitions:

Clothing

Clothing and items donned on the body, usually crafted from textiles or cloths.

Food

Consumable items produced through agriculture, farming, hunting, fishing, or food processing that individuals eat for nutrition and pleasure.

Perfectly Competitive Market

A theoretical market structure characterized by many buyers and sellers, homogeneous products, and no barriers to entry or exit, where all entities are price takers.

Knowledge

Information, understanding, or skills acquired through education or experience.