130 120 110 100 0 16 SAS ADO AD₂ AD₁ 17 18 19 20 21 Real GDP (trillions of 2009 dollars) increase government expenditures. the above figure, the economy experiences an increase in aggregate demand so that the aggregate emand curve shifts from ADO to AD2. If the Fed wants to offset this change, it would purchase government securities on the open market. Osell government securities on the open market. raise taxes.

130 120 110 100 0 16 SAS ADO AD₂ AD₁ 17 18 19 20 21 Real GDP (trillions of 2009 dollars) increase government expenditures. the above figure, the economy experiences an increase in aggregate demand so that the aggregate emand curve shifts from ADO to AD2. If the Fed wants to offset this change, it would purchase government securities on the open market. Osell government securities on the open market. raise taxes.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 2CQQ

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