Exhibit 15-3 -In the Situation Shown in Exhibit 15-3,how Could the Fed

Multiple Choice

Exhibit 15-3
-In the situation shown in Exhibit 15-3,how could the Fed return the economy to potential output?

A) decrease government spending
B) decrease excess reserves in the banking system
C) sell U.S.government bonds to banks
D) increase the discount rate
E) lower the required reserve ratio