Consider the graphs, which show aggregate supply (AS) and the change in aggregate demand (AD) from AD¡ to AD2 that will result from the monetary policies. Match each policy with the graph showing the corresponding shift. AD, AD, Answer Bank The central bank sells bonds on the The central bank increases the required open market. reserve ratio. The central bank uses open market operations to conduct expansionary monetary policy. AS Real GDP The central bank buys bonds from private banks. AD, AD, The central bank increases the The central bank decreases the money supply. discount rate. AS Price level Price level

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