Figure 15-8
-Refer to Figure 15-8.In the figure above,if the economy is at point A,the appropriate monetary policy by the Federal Reserve would be to
A)lower interest rates.
B)raise interest rates.
C)lower income taxes.
D)raise income taxes.

Question

Figure 15-8 
-Refer to Figure 15-8.In the figure above,if the economy is at point A,the appropriate monetary policy by the Federal Reserve would be to
A)lower interest rates. 
B)raise interest rates. 
C)lower income taxes. 
D)raise income taxes.

Quizplus · Accepted Answer

At point A, the economy is experiencing inflationary pressures due to high aggregate demand. Thus, the appropriate monetary policy by the Federal Reserve would be to raise interest rates to reduce borrowing, spending, and aggregate demand.

Figure 15-8 -Refer to Figure 15-8.In the Figure Above,if the Economy Is