In the Keynesian Model,suppose the Fed Sets a Target for the Money

question 103

Multiple Choice

In the Keynesian model,suppose the Fed sets a target for the money supply.If the IS curve shifts to the left,and the Fed wants to keep output unchanged,what should the Fed do?

• A)Reduce taxes.
• B)Reduce the money supply.
• C)Increase taxes.
• D)Increase the money supply.

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