-In the above figure, the economy experiences a decrease in aggregate demand so that the aggregate demand curve shifts from AD₀ to AD₁. If the Fed wants to offset this change, it would

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To offset a decrease in aggregate demand, the Federal Reserve (Fed) can purchase government securities on the open market. This action increases the money supply, lowers interest rates, and stimulates borrowing and spending, which can help to increase aggregate demand back to its original level.

-In the Above Figure, the Economy Experiences a Decrease in Aggregate