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Question 11 2 pts LRAS P SRAS A AD3 D AD2 E AD1 AD-AS graph has one vertical LRAS line, one upward-sloping SRAS line, and
Question 11 2 pts LRAS P SRAS A AD3 D AD2 E AD1 AD-AS graph has one vertical LRAS line, one upward-sloping SRAS line, and three downward sloping AD lines (AD1, AD2, and AD3 from left to right). There are 5 labeled intersecting points (points A-E). Point A is near the top of the LRAS line, where AD3 intersects with it. Point B is to the right of the LRAS line, where AD3 intersects with the SRAS line. Point C is on the LRAS line, where AD2 and the SRAS line all intersect. Point D is to the left of the LRAS line, where AD1 intersects with the SRAS line. Point E is near the bottom of the LRAS line, where it intersects with AD1. Suppose the economy is in a recession and the Fed pursues expansionary monetary policy. Using the basic AD-AS model in the figure above, this would be depicted as a movement from O A to E O C to D O D to C O C to B O B to C Question 12 2 pts Looking at a basic AD-AS model and holding all else constant, if the FOMC raises the reserve requirements, we would see the price level and the real GDP O fall; fall O rise; fall O rise; rise O fall; rise Question 13 2 pts Looking at a basic AD-AS model and holding all else constant, if the FOMC lowers the interest rate paid on reserves and reverse repurchasing agreements, we would see the price level and the real GDP O fall; fall O fall; rise O rise; rise O rise; fall
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