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

question 239

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 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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Definitions:

Charitable Trust

A trust established for a purpose considered beneficial to the public rather than private benefits, which might include relief of poverty, advancement of education, or other purposes deemed charitable in law.

Trustee

A person in whom property is vested in trust for another.

Illegal

Refers to actions or activities that are prohibited by law or statute.

Spendthrift Clause

A provision in a trust that prevents beneficiaries from pledging or assigning their interest in the trust's assets to creditors, offering protection from creditors' claims.