Suppose There Is a Decrease in Aggregate Demand

question 33

Multiple Choice

Suppose there is a decrease in aggregate demand.If the Fed wants to stabilize output it could

• 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 sales also move the price level closer to its original level.
• D)sell bonds.However these sales move the price level farther from its original level.

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Definitions:

Degrees

A unit of measurement used to determine angles or temperature.

Rack-and-pinion

A type of linear actuator that comprises a circular gear (the pinion) engaging a linear gear (the rack), converting rotary motion into linear motion.

Parallelogram Steering

A steering linkage design in many vehicles where the linkage forms a parallelogram, allowing the wheels to move parallel to each other during turns.

Linkage Components

Various mechanical parts that connect together to transmit motion in order to perform a specific task.