The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should buy government securities and thereby decrease aggregate demand. buy government securities and thereby increase aggregate demand. buy government securities and thereby increase aggregate supply. reduce the required reserve ratio and thereby increase aggregate demand. c and d.

The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should buy government securities and thereby decrease aggregate demand. buy government securities and thereby increase aggregate demand. buy government securities and thereby increase aggregate supply. reduce the required reserve ratio and thereby increase aggregate demand. c and d.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter11: Gross Domestic Product

Section: Chapter Questions

Problem 6SQ

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