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If the Economy Is Represented in the Graph Shown and Is

Question 47

Multiple Choice

If the economy is represented in the graph shown and is currently at point E<sub>2</sub>, which action is the Fed most likely to undertake? A) Expansionary monetary policy, because it will shift AD to the right. B) Contractionary monetary policy, because it will shift AD to the left. C) Expansionary monetary policy, because it will shift AD to the left. D) Contractionary monetary policy, because it will shift AS to the right. If the economy is represented in the graph shown and is currently at point E2, which action is the Fed most likely to undertake?


A) Expansionary monetary policy, because it will shift AD to the right.
B) Contractionary monetary policy, because it will shift AD to the left.
C) Expansionary monetary policy, because it will shift AD to the left.
D) Contractionary monetary policy, because it will shift AS to the right.

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