(Solved): An expansionary monetary policy Multiple Choice Is used when the Inflation rate is high. is design ...

An expansionary monetary policy Multiple Choice Is used when the Inflation rate is high. is designed to reduce aggregate demand. can reduce the length of a recesslon. shlfts the aggregate supply curve to the right. Use the following graph to answer the next questlon. The economy is at equilibrium at point \( \mathrm{C} \), which is below potential output. What fiscal policy would Increase real GDP? Multiple Choice Shlft aggregate demand to the rlght by increasing taxes. Shlft aggregate demand to the left by decreasing taxes. Shift aggregate demand to the left by decreasing government purchases. Shlft aggregate demand to the right by increasing government purchases. The purpose of a contractionary monetary policy is to Multiple Choice allevlate recessions. raise interest rates and restrlct the avallability of bank credit. Increase aggregate demand and GDP. Increase investment spending. The sale of government bonds by the Federal Reserve Banks to commerclal banks will Multiple Cholce Increase aggregate supply. decrease aggregate supply. Increase aggregate demand. decrease aggregate demand. An increase in the reserve requirement Multiple Cholce Increases the money supply by increasing excess reserves and increasing the monetary multiplier. decreases the money supply by decreasing excess reserves and decreasing the monetary multipler. Increases the money supply by decreasing excess reserves and decreasing the monetary multipler. decreases the money supply by increasing excess reserves and decreasing the monetary multiplier.