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Exhibit 20-4  Aggregate Demand and Supply Model in Exhibit 20-4

Question 239

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Exhibit 20-4  Aggregate demand and supply model Exhibit 20-4  Aggregate demand and supply model In Exhibit 20-4, which one of the following actions could the Fed use to shift the AD curve from AD<sub>3</sub> to AD<sub>2</sub>? A) Lower the discount rate. B) Lower the federal funds rate C) Raise the federal funds rate. D) Raise the legal reserve requirement E) Buy government securities. In Exhibit 20-4, which one of the following actions could the Fed use to shift the AD curve from AD3 to AD2?


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

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