In the best case scenario,the Federal Reserve can increase the money supply after a negative shock to AD and restore the growth rate.

Question

Quizplus · Accepted Answer

This is true because the Federal Reserve has the ability to increase the money supply through expansionary monetary policy, which can help stimulate spending and investment and ultimately restore economic growth. However, the effectiveness of this approach may depend on various factors, such as the severity and duration of the negative shock to AD, the responsiveness of consumers and businesses to changes in interest rates, and the state of the overall economy at the time.

In the Best Case Scenario,the Federal Reserve Can Increase the Money