Figure 26-16 
-Refer to Figure 26-16. In the figure above, suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B. Which of the following policies could the Federal Reserve use to move the economy to point C?
Definitions:
Merchandise Inventory
Goods that a retailer or wholesaler purchases for resale to customers.
Ending Merchandise Inventory
The final stock value of goods being sold by a retail or wholesale company at the close of an accounting period.
Purchase Allowances
Reductions in the price paid by a buyer to a seller, due to minor defects or quality issues with the goods provided.
Price Reduction
A decrease in the selling price of products or services, often to drive sales or clear inventory.
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