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To Combat Inflation in 1955 and 1956, the Fed Reduced

Question 48

Multiple Choice

To combat inflation in 1955 and 1956, the Fed reduced the money supply. In terms of the AS/AD model, this change should have:

A) shifted the AD curve to the left.
B) shifted the AD curve to the right.
C) made the AD curve flatter.
D) made the AD curve steeper.

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