Exhibit 20-4 Aggregate demand and supply model In Exhibit 20-4, 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.

Question

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The Answer of Exhibit 20-4 Aggregate demand and supply model In Exhibit 20-4, 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.

Exhibit 20-4 Aggregate Demand and Supply Model in Exhibit 20-4