Suppose There Is a Decrease in Short-Run Aggregate Supply

question 15

Multiple Choice

Suppose there is a decrease in short-run aggregate supply.If the Federal Reserve wants to stabilize output it should

• A)buy bonds.These purchases also move the price level closer to its original level.
• B)buy bonds.However these purchases move the price level farther from its original level.
• C)sell bonds.These purchases also move the price level closer to its original level.
• D)sell bonds.However these purchase move the price level farther from its original level.

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Definitions:

Quotas

Predetermined targets set for sales, production, or other activities that individuals or organizations aim to achieve within a specific time frame.

Interdependence

A situation in which two or more elements or systems rely on each other to function properly, often seen in economic, social, and ecological systems.

Economic

Pertaining to the production, consumption, and transfer of wealth in a region or society.

Cultural

Pertaining to the ideas, customs, social behaviors, and characteristics of a particular society, group, place, or time.