Figure 26-6

-Refer to Figure 26-6.In the figure above suppose the economy is initially at point A.The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?

Question

Figure 26-6
 
-Refer to Figure 26-6.In the figure above suppose the economy is initially at point A.The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?

Quizplus · Accepted Answer

An open market purchase of Treasury bills by the Federal Reserve would increase the money supply in the economy, leading to an increase in aggregate demand and a shift from point A to point B on the graph. Option A and B are unlikely to have a direct impact on the money supply or aggregate demand, and option D would decrease the money supply and shift the economy to a point leftward of A on the graph.

Figure 26-6 -Refer to Figure 26-6.In the Figure Above Suppose the Economy