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Exhibit 16-4 Aggregate Demand and Supply Model in Exhibit

Question 8

Multiple Choice

Exhibit 16-4 Aggregate demand and supply model Exhibit 16-4 Aggregate demand and supply model In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD<sub>1</sub> to AD<sub>2</sub>? A) Raise the legal reserve requirement. B) Lower the discount rate. C) Lower the federal funds rate. D) Sell government securities. E) Raise the federal funds rate. In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD1 to AD2?


A) Raise the legal reserve requirement.
B) Lower the discount rate.
C) Lower the federal funds rate.
D) Sell government securities.
E) Raise the federal funds rate.

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