Exhibit 20-4 Aggregate Demand and Supply Model

question 107

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.

---

Definitions:

Credibility

The quality of being trusted and believed in, often based on a reputation for integrity and truthfulness.

Children's Recollections

The process through which children remember and recount past experiences or events.

Sexual Abuse

Inappropriate or coercive sexual behavior towards another individual without consent, often resulting in significant harm and trauma.

Interference

A cognitive process that impedes the ability to learn or remember information because of previously learned material or future learning.