Figure 17-1 -Refer to Figure 17-1.Suppose That the Economy Is Currently at Is

Multiple Choice

Figure 17-1
-Refer to Figure 17-1.Suppose that the economy is currently at point A,and the unemployment rate at A is the natural rate.What policy would the Federal Reserve pursue if it wanted the economy to move to point B in the long run?

A) Buy treasury bills.
B) Sell treasury bills.
C) Raise the discount rate.
D) Decrease the money supply.
E) No policy by the Federal Reserve will move the economy to point B in the long run.