Use the following to answer questions .
Exhibit: Economic Adjustments
-(Exhibit: Economic Adjustments) If the economy is at point c, an open market purchase would cause

Question

Use the following to answer questions .
Exhibit: Economic Adjustments 
-(Exhibit: Economic Adjustments) If the economy is at point c, an open market purchase would cause

Quizplus · Accepted Answer

An open market purchase increases the money supply, which lowers interest rates and increases investment and consumption, leading to a rightward shift in the aggregate demand curve from AD₁ to AD₂.

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