If the Federal Reserve buys back government bonds from commercial banks and the commercial banks do not loan out the excess reserves, the money supply will increase and aggregate demand will increase. the money supply will decrease and aggregate demand will decrease. the money supply will not change and aggregate demand will not change. the money supply will increase and aggregate demand will decrease. During the late 1990s, the U.S. economy boomed. GDP increased from 14.1% to 17.2% in 2000 and fell to 15.2% by 2002. This would be described as the ups and downs in the business cycle. an inflationary gap. a deflationary gap. the government's fault