Overall Price Level 52 39 31- D 18 23 AD 31 Real GDP AD1 AS AD2 Please refer to the graph above. Assume we begin in equilibrium at ADO and AS. Ceteris paribus, if the Federal Reserve wants to achieve expansionary monetary policy, which action will they take and what are the new price level and real GDP? O Increase discount rate; $39 price level and 31 real GDP O decrease required reserve ratio; $52 price level and 31 real GDP O Increase required reserve ratio: $31 price level and 18 real GDP O Increase required reserve ratio: $39 price level and 23 real GDP
Overall Price Level 52 39 31- D 18 23 AD 31 Real GDP AD1 AS AD2 Please refer to the graph above. Assume we begin in equilibrium at ADO and AS. Ceteris paribus, if the Federal Reserve wants to achieve expansionary monetary policy, which action will they take and what are the new price level and real GDP? O Increase discount rate; $39 price level and 31 real GDP O decrease required reserve ratio; $52 price level and 31 real GDP O Increase required reserve ratio: $31 price level and 18 real GDP O Increase required reserve ratio: $39 price level and 23 real GDP
Chapter13: Monetary Policy: Conventional And Unconventional
Section: Chapter Questions
Problem 7DQ
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