6. In response the recession, the federal government borrows funds to increase spending engaging in expansionary fiscal policy. Cost of Real Credit H S X D RC Answer for r and RC: 7. The federal government increases spending to mitigate a recession. P AS AD Activ RGDP Go to8. The central bank lowers interest rates to zero. H P AS AD RGDP Answer for P and RGDP: | 9. The central bank lowers the interest rate engaging in expansionary monetary policy. Show the change in each market beginning with the Real Credit Market. Cost of Real Credit P S AS AD D RGDP RC Anowar forr DO P and RenD.Answer for r, RC, P, and RGDP: 10. The federal government engages in expansionary fiscal policy. Show the effect in each sector beginning with the Credit Market. Cost of Real Credit P S AS AD D RGDP RC Answer for r, RC, P, and RGDP:11. To keep the domestic currency from depreciating, the central bank intervenes in the foreign exchange market purchasing the domestic currency with its foreign exchange holdings. FX rate S X D Domestic currency/time period Answer for FX and Q of domestic currency: 12. To keep the domestic currency from depreciating, the central bank increases the interest rate above the prevailing rate in other developed countries. FX rate S X DDomestic currency/time period Answer for FX and Q of domestic currency