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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