Figure: Monetary Policy Reference: Ref 16-1 (Figure: Monetary Policy)

Multiple Choice

Figure: Monetary Policy Reference: Ref 16-1 (Figure: Monetary Policy) Assume that the economy is initially at Point Y. In the best case scenario, the Fed will

A) increase money supply to take the economy to Point X.
B) decrease money supply to take the economy to Point W.
C) increase money supply to take the economy to Point W.
D) decrease money supply to take the economy to Point X.