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Chapter 16 PQ - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Figure 16-1 1) Refer to Figure 16 - 1. What should the Federal Reserve do if it wants to move from point A to point B in the short - run Phillips curve depicted in the figure above? A)lower taxes B)lower the discount rate C)buy treasury bills D)increase the money supply E)sell treasury bills 1) 2) Refer to Figure 16 - 1. 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 B in the long run? 2) 3) Refer to Figure 16 - 1. Suppose that the economy is currently at point A on the short - run Phillips curve in the figure above, and the unemployment rate at A is the natural rate. If the economy was to move to point C, which of the following must be true?
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