Figure 14.1 -Refer to Figure 14.1.Ceteris paribus,which of the following Fed actions will shift the aggregate demand curve from AD₁ to AD₂? A) An increase in the discount rate. B) A decrease in the reserve requirement. C) The sale of bonds in the open market by the Fed. D) A decrease in the money multiplier.

Question

Quizplus · Accepted Answer

A decrease in the reserve requirement increases the money supply by allowing banks to lend more, which can stimulate economic activity and shift the aggregate demand curve to the right.

Figure 14.1 -Refer to Figure 14.1.Ceteris Paribus,which of the Following Fed Actions