To close a recessionary gap, the Fed would

Name: To close a recessionary gap, the Fed would
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Question

Quizplus · Accepted Answer

To close a recessionary gap, the Fed would need to increase aggregate demand, which can be accomplished through increasing the money supply. This can be done by purchasing government securities or through lowering the reserve requirement for banks, leading to an increase in lending and ultimately an increase in spending.

To Close a Recessionary Gap, the Fed Would