To close a recessionary gap, the Fed would A) decrease the ...

[imanialler]

To close a recessionary gap, the Fed would
 
  A) decrease the money supply.
  B) increase interest rates.
  C) sell bonds.
  D) increase the money supply.

Question 2

The horizontal portion of the short-run aggregate supply curve in which there is excessive unemployment and unused capacity in the economy is
 
  A) Say's law.
  B) the classical short-run aggregate supply curve.
  C) the Keynesian short-run aggregate supply curve.
  D) exists when prices are flexible.

[Toya9913]

Answer to Question 1

D

Answer to Question 2

C