When the ________, the Fed is willing to accept large changes in output to keep the price level stable.
A) AD curve is relatively flat
B) AD curve is relatively steep
C) AS curve is relatively flat
D) AS curve is relatively steep

Question

Quizplus · Accepted Answer

The AD curve is relatively flat when the Fed is willing to accept large changes in output to keep the price level stable. This is because a flat AD curve means that the Fed can increase or decrease the money supply without causing a significant change in the price level.

When the ________, the Fed Is Willing to Accept Large