-In the above figure, suppose the economy is at point D. Which of the following occurs as a result of an open market purchase of government securities by the Fed?

Question

Quizplus · Accepted Answer

An open market purchase of government securities by the Fed increases the money supply, leading to lower real interest rates, which encourages investment and can also make domestic goods cheaper for foreign buyers, increasing exports.

-In the Above Figure, Suppose the Economy Is at Point