Assume that the economy has just suffered a recessionary gap due to a dramatic drop in consumer confidence as news of trade negotiations with China deteriorate.

Charting the decline the consumer purchases and business investment, the aggregate demand curve has shifted to the left by $700 billion dollars.

As a newly hired economist and assistant to the Chairman of the Federal Reserve Bank, you are tasked with the responsibility to present an action plan using the tools of monetary policy.

How would we move the AD back to full employment?