The Federal Reserve fights recession via open market operations, the supply of loanable funds curve shifts ________ and the aggregate demand curve shifts ________.

Question

Quizplus · Accepted Answer

When the Federal Reserve fights recession via open market operations, it typically buys securities, which increases the money supply. This action shifts the supply of loanable funds curve rightward (making more funds available for borrowing at lower interest rates) and stimulates the economy, causing the aggregate demand curve to shift rightward as well (indicating an increase in overall demand in the economy).

The Federal Reserve Fights Recession Via Open Market Operations, the Supply