Home /
Expert Answers /
Economics /
use-the-following-diagram-to-answer-the-next-question-assume-the-economy-is-initially-on-aggregate-pa649
(Solved): Use the following diagram to answer the next question. Assume the economy is initially on aggregate ...
Use the following diagram to answer the next question. Assume the economy is initially on aggregate demand AD2. The Fed should
Multiple Choice buy bonds. increase the reserve requirement. lower the prime rate. raise the discount rate.
Expert Answer
Answer Ans (option 1) Buy Bond Explanation - At the AD2 point, the economy has a recessionary condition. In such a situation, the cen