Multiple Choice
When aggregate demand decreases, the Fed will want to use its policy tools to
A) keep aggregate demand lower until wages catch up.
B) quickly bring aggregate demand back to its original position.
C) push aggregate demand higher than it was originally to make up for lost growth potential.
D) None of these answers is correct.
Correct Answer:

Verified
Correct Answer:
Verified
Q23: If the Fed wants to raise real
Q104: Monetary policy can be difficult for the
Q106: What is the difference between disinflation and
Q107: If the public's demand for cash increases,
Q108: What do many economists think contributed to
Q110: Rising home prices between 2002 and 2005
Q111: Because the Fed can easily provide too
Q112: If the Fed sets a target rate
Q172: The housing boom of the 2000s is
Q218: Disinflation occurs when the Fed:<br>A) raises the