Figure 42.2 Moving to Full Employment LRAS SRAS AD REAL GDP 2. Suppose that initially the economy is at the intersection of AD and SRAS in Figure 42.2. (A) What monetary policy should the Fed implement to move the economy to full-employment output? (B) If the Fed is going to use open market operations, it should (buy / sell) Treasury securities. (C) What is the effect on Treasury security (bond) prices? PRICE LEVEL

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