Use the Figure Below to Answer the Following Question(s)

question 110

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 14-2

-If the Fed anticipates that the conditions illustrated by AD₂ and SRAS in Figure 14-2 will be present in the near future,it should

• A)decrease the discount rate.
• B)reduce reserve requirements.
• C)sell U.S.treasury bonds on the open market.
• D)buy U.S.treasury bonds on the open market.

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Definitions:

Investment Products

Various types of assets and securities (e.g., stocks, bonds, mutual funds) that individuals can invest in hoping to earn returns.

PCAOB

Public Company Accounting Oversight Board, a nonprofit corporation established by Congress to oversee the audits of public companies to protect investors.

FINRA

The Financial Industry Regulatory Authority, a non-governmental organization that regulates member brokerage firms and exchange markets, ensuring fairness and honesty in the financial industry.

Public Companies

Corporations that have issued securities through an initial public offering (IPO) and are traded on at least one stock exchange or in over-the-counter markets.