In the Keynesian model, suppose the Fed sets a target for the money supply. If the IS curve shifts to the left, and the Fed wants to keep output unchanged, what should the Fed do?

A. Reduce taxes.
B. Increase taxes.
C. Reduce the money supply.
D. Increase the money supply.

Answer: D

Economics

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Roughly what was the Democratic Republic of Congo's per capita GDP in 2011?

A) $110 B) $1,100 C) $11,000 D) $110,000

Economics

Suppose the Fed announced that it has chosen to accept a temporary period of above-target inflation. Assuming that the announcement is seen as credible, this will tend to increase inflationary expectations, which will result in

A) the AD curve shifting to the right. B) the AD curve shifting to the left. C) the AS curve shifting to the right. D) the AS curve shifting to the left.

Economics