-Refer to Exhibit 15-3

Multiple Choice

-Refer to Exhibit 15-3.The economy is currently at point 4.The Fed increases the money supply and the economy ends up at point 8.Has monetary policy been effective at moderating the business cycle?

A) Yes,since it eliminated the recessionary gap.
B) Yes,since it decreased the unemployment rate.
C) Yes,since it increased Real GDP.
D) No,since it has moved the economy from a recessionary gap to an inflationary gap.
E) a,b and c