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rephrase the following: a) As Fed buys more than $2 trillion of Treasury and mortgage bonds to stimulate the economy then money supply will increase
rephrase the following: a) As Fed buys more than $2 trillion of Treasury and mortgage bonds to stimulate the economy then money supply will increase in the economy and with the increase in money supply the purchasing power of the public will increase and because of this the demand of goods and services will increase thus shifting the AD curve out to the right. b)an increase in inflation caused by the action adopted above will cause to fall in demand by the consumer because they would find it expensive to buy the same goods.This will lead to fall in demand for goods, leading to a leftward shifting of the demand curve. c) when the dollar is weak it helps in increasing exports which in turn helps in getting more currency in an economy.This is one of the good measure to strengthen the value of the currency but it also has an effect on the supply of that product in an economy.If they are exporting to other countries then their domestic supply for the product will be squeezed which will have an effect on the AS curve. d) When business have access to cheap credit they will be reluctant to borrow
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