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In the Keynesian Model,suppose the Fed Sets a Target for the Money

Question 103

Multiple Choice

In the Keynesian model,suppose the Fed sets a target for the money supply.If the IS curve shifts to the left,and the Fed wants to keep output unchanged,what should the Fed do?


A) Reduce taxes.
B) Reduce the money supply.
C) Increase taxes.
D) Increase the money supply.

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