Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions
Figure: Monetary Policy
-(Figure: Monetary Policy) Refer to the figure.Assume that the economy is initially at point Y in the graph.If the Fed takes the appropriate action with monetary policy,but banks are slow to lend,then:

A) the Fed action would be magnified and the economy would move to point X.
B) the Fed action would be nullified and the economy would remain at point Y.
C) the Fed action would be partially effective and the economy would move to point Z.
D) the LRAS curve would shift to the left.