Refer to Figure 28-1. What should the Federal Reserve do if it wants to move from point A to point C in the short-run Phillips curve depicted in the figure above?
A) raise taxes
B) raise the discount rate
C) sell treasury bills
D) decrease the money supply
E) buy treasury bills
Question 2
Refer to Figure 28-1. Suppose that the economy is currently at point A. If the Federal Reserve engaged in expansionary monetary policy, where would the economy end up in the short run?
A) It would remain at point A.
B) point B
C) point C
D) point D
E) point E
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Figure and Ground
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