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Figure 15-14 Price level LRAS, LRAS, SRAS SRAS, 104 C 102 B 100 AD (with policy) AD, AD, (without policy) 0 14 14.7 15 Real

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Figure 15-14 Price level LRAS, LRAS, SRAS SRAS, 104 C 102 B 100 AD (with policy) AD, AD, (without policy) 0 14 14.7 15 Real GDP Refer to Figure 15-14. In the figure above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could the Federal Reserve use to move the economy to point C? buy Treasury bills increase the required-reserve ratio O sell Treasury bills O decrease income taxes

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