To fight unemployment and close a recessionary gap, the Fed ________. A. stimulates aggregate demand by lowering

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To fight unemployment and close a recessionary gap, the Fed ________.

A. stimulates aggregate demand by lowering the federal funds rate, which increases the quantity of money B. stimulates aggregate supply by lowering the federal funds rate, which increases potential GDP C. increases employment, which increases real GDP D. increases bank reserves, which banks use to make new loans to businesses, which increases aggregate supply

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Essential Foundations Of Economics

ISBN: 9781786633255

8th Edition

Authors: Robin Bade, Michael Parkin

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