The figure given below depicts short-run equilibrium in an aggregate demand-aggregate supply model.The Fed can return the economy to potential output in the long run by:

A)purchasing U.S.government securities.
B)decreasing taxes.
C)selling U.S.government securities.
D)lowering the discount rate.
E)lowering the required reserve ratio.

Question

The figure given below depicts short-run equilibrium in an aggregate demand-aggregate supply model.The Fed can return the economy to potential output in the long run by:

A)purchasing U.S.government securities. 
B)decreasing taxes. 
C)selling U.S.government securities. 
D)lowering the discount rate. 
E)lowering the required reserve ratio.

Quizplus · Accepted Answer

The Answer of The figure given below depicts short-run equilibrium in an aggregate demand-aggregate supply model.The Fed can return the economy to potential output in the long run by:

A)purchasing U.S.government securities. 
B)decreasing taxes. 
C)selling U.S.government securities. 
D)lowering the discount rate. 
E)lowering the required reserve ratio.

The Figure Given Below Depicts Short-Run Equilibrium in an Aggregate