Refer to the information provided in Figure 11.5 below to answer the questions that follow. Figure 11.5
-Refer to Figure 11.5.The money supply curve will shift from to if

Question

Refer to the information provided in Figure 11.5 below to answer the questions that follow.  Figure 11.5
-Refer to Figure 11.5.The money supply curve will shift from  to  if

Quizplus · Accepted Answer

When the Fed buys U.S. government securities in the open market, it increases the reserves of banks, which in turn allows them to make more loans and create more money. This shifts the money supply curve to the right (from 11eaaeef_9a6b_6e3f_933a_69aebcd5f2fe_TB2926_11 to 11eaaeef_9a6b_9550_933a_05931035a553_TB2926_11), increasing the equilibrium level of output. None of the other options listed would directly cause a shift in the money supply curve.

Refer to the Information Provided in Figure 11