Use the following to answer questions . Exhibit: Monetary Policy 1 -(Exhibit: Monetary Policy 1) By shifting the demand curve from D₁ to D₂, the Fed is exercising A) contractionary monetary policy to lower interest rates. B) expansionary monetary policy to lower interest rates. C) contractionary monetary policy to increase interest rates. D) expansionary monetary policy to increase interest rates.

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By shifting the demand curve from D₁ to D₂, the Fed is shifting the money supply to the right, indicating expansionary monetary policy to lower interest rates.

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