Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply.
B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects.
C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant.
D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
B
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Historically, realists have viewed competition over resources as
a. a major cause of war. b. a method for solving collective action problems. c. an exploitation of developing countries. d. a way for poor nations to raise their standard of living.
In an open economy, increases in government spending can crowd out consumption, investment, or net exports
Indicate whether the statement is true or false