Use the Figure Below to Answer the Following Question(s)

Multiple Choice

Use the figure below to answer the following question(s) . Figure 14-2
If the Fed anticipates that the conditions illustrated by AD₂ and SRAS in Figure 14-2 will be present in the near future, it should

A) decrease the discount rate.
B) reduce reserve requirements.
C) sell U.S. treasury bonds on the open market.
D) buy U.S. treasury bonds on the open market.