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Price Level Suppose the economy is initially in long-run equilibrium The Fed enacts a

Price Level Suppose the economy is initially in long-run equilibrium. The Fed enacts a policy to decrease the discount rate. In the short-run, this expansionary monetary policy will cause: SRAS2 AS SRAS, O A. A shift from SRAS, to SRAS, and a movement to point B, with a lower price level and higher output OB. A shift from AD, to AD, and a movement to point B, with a higher price level and higher output. OC. A shift from AD to AD, and a movement to point C, with a lower price level and the same output. OD. A shift from SRASą to SRAS, and a movement to point D, with a higher price level and lower output. AD2 AD 22 16 6 5 10 12 14 Real GDP (trillions of 2000 dollars)

Feb 01 2020 View more View Less

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