Ceteris paribus,which of the following will occur if the Fed buys bonds through open-market operations?
A) The aggregate supply curve should shift leftward.
B) The aggregate supply curve should shift rightward.
C) The aggregate demand curve should shift leftward.
D) The aggregate demand curve should shift rightward.

Question

Quizplus · Accepted Answer

When the Fed buys bonds through open-market operations, it injects money into the economy, increasing the money supply. This typically lowers interest rates, encouraging borrowing and spending, which shifts the aggregate demand curve rightward.

Ceteris Paribus,which of the Following Will Occur If the Fed