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Exhibit 16-4 Aggregate Demand and Supply Model in Exhibit

Question 120

Multiple Choice

Exhibit 16-4 Aggregate demand and supply model Exhibit 16-4 Aggregate demand and supply model   In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD<sub>3</sub> to AD<sub>2</sub>? A) Lower the discount rate. B) Lower the federal funds rate C) Raise the federal funds rate. D) Raise the legal reserve requirement E) Buy government securities. In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD3 to AD2?


A) Lower the discount rate.
B) Lower the federal funds rate
C) Raise the federal funds rate.
D) Raise the legal reserve requirement
E) Buy government securities.

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