Figure 14.6
-Refer to Figure 14.6. The money supply curve will shift from ,if:

Question

Figure 14.6
-Refer to Figure 14.6. The money supply curve will shift from  ,if:

Quizplus · Accepted Answer

When the Fed buys U.S. government bonds in the open market, it increases the reserves of banks, leading to an increase in the money supply. This causes the money supply curve to shift to the right, from 11eca50b_e557_26f3_a5af_294d48f44ed4_TB34225555_11. An increase in the price level (B) would result in a movement along the same money supply curve, not a shift. A decrease in equilibrium level of output (C) would shift the aggregate demand curve, not the money supply curve. An increase in the reserve requirement (D) would decrease the reserves of banks and decrease the money supply, causing the money supply curve to shift to the left.

Figure 14.6 -Refer to Figure 14.6. the Money Supply Curve Will Shift