Use the following to answer questions:
-(Figure: Monetary Policy and the AD-SRAS Model)Refer to Figure: Monetary Policy and the AD-SRAS Model.If the economy is in a recessionary gap at point f,it could move to point g as a result of:

Question

Use the following to answer questions: 
-(Figure: Monetary Policy and the AD-SRAS Model)Refer to Figure: Monetary Policy and the AD-SRAS Model.If the economy is in a recessionary gap at point f,it could move to point g as a result of:

Quizplus · Accepted Answer

To move from point f to point g, the AD curve needs to shift to the right. This can be achieved by increasing aggregate demand through purchases of government securities in the open market, thereby lowering interest rates and increasing investment, consumption, and net exports. Options A, B, and C all involve reducing aggregate demand, which would further deepen the recessionary gap at point f.

Use the Following to Answer Questions