Refer to the figure. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run? O A. Buy Treasury bills. O B. Sell Treasury bills. O C. Lower the discount rate. ⒸD. No policy by the Federal Reserve will move the economy to point C in the long run.
Refer to the figure. Suppose that the economy is currently at point A, and the unemployment rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the economy to move to point C in the long run? O A. Buy Treasury bills. O B. Sell Treasury bills. O C. Lower the discount rate. ⒸD. No policy by the Federal Reserve will move the economy to point C in the long run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Refer to the figure. Suppose that the economy is currently at point A, and the unemployment
rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the
economy to move to point C in the long run?
O A. Buy Treasury bills.
O B. Sell Treasury bills.
O C. Lower the discount rate.
O D. No policy by the Federal Reserve will move the economy to point C in the long run.
Inflation
rate
(percent
per year)
0
E
Phillips curve
Unemployment
rate (percent)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3de1df36-35f4-49ec-abf1-fac6975ad2ad%2F5be4f197-0c24-47a4-a6e6-85d82c1a4e91%2Ft2v1cyl_processed.png&w=3840&q=75)
Transcribed Image Text:Refer to the figure. Suppose that the economy is currently at point A, and the unemployment
rate at A is the natural rate. What policy would the Federal Reserve pursue if it wanted the
economy to move to point C in the long run?
O A. Buy Treasury bills.
O B. Sell Treasury bills.
O C. Lower the discount rate.
O D. No policy by the Federal Reserve will move the economy to point C in the long run.
Inflation
rate
(percent
per year)
0
E
Phillips curve
Unemployment
rate (percent)
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