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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Only typed answer

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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