If There Is an Autonomous Increase in Spending (A Rightward

question 89

Multiple Choice

If there is an autonomous increase in spending (a rightward shift in the aggregate demand curve) and the Fed wishes to hold real income constant,then the Fed would:

• A)decrease the money supply yielding a leftward shift in the aggregate demand curve.
• B)increase the money supply yielding a rightward shift in the aggregate demand curve.
• C)hold the money supply constant.
• D)none of the above.

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