Multiple Choice
Use the following to answer questions .
Exhibit: Economic Adjustments 
-(Exhibit: Economic Adjustments) If the economy is at point c, the Federal Reserve can close the output gap
A) by pursuing an expansionary monetary policy to raise the interest rate and increase short run aggregate supply.
B) by pursuing a contractionary monetary policy to drive down the interest rate and increase aggregate demand.
C) by pursuing an expansionary monetary policy to drive down the interest rate and increase aggregate demand.
D) by pursuing a contractionary monetary policy to raise the interest rate and increase short run aggregate supply.
Correct Answer:
Verified
Correct Answer:
Verified
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