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Question
Suppose the economy is operating below its full employment level. The Fed
A) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
B) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply.
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) 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.
Answer
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Related questions
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