Assume that the economy is experiencing a recession with significant unemployment.

• Should the Federal Open Market Committee increase, decrease, or keep the same target Federal Funds rate?
• To accomplish this, will the Fed increase or decrease the money supply?
• What effect does this have on the Aggregate Demand/Aggregate Supply graph in the short run?

oBe sure to label both axes in words

oLabel all curves in words

oIndicate the initial equilibrium

• Does the real GDP increase, decrease, or remain the same?
• Does the price level increase, decrease, or remain the same?
• Is this the current policy of the Federal Open Market Committee?

Any help is greatly appreciated!!