Figure 11-2 -Refer to Figure 11-2. By shifting the demand curve from D₁ to D₂, the Fed is attempting to A) contract the economy by increasing interest rates. B) expand the economy by increasing interest rates. C) contract the economy by decreasing interest rates. D) expand the economy by decreasing interest rates.

Question

Quizplus · Accepted Answer

Shifting the demand curve from D1 to D2 typically indicates an increase in demand, which the Fed might achieve by decreasing interest rates to make borrowing cheaper, thereby expanding the economy.

Figure 11-2 -Refer to Figure 11-2. by Shifting the Demand Curve from Demand