The Following Questions Refer to the graph below. -A shift from MS¹ to MS² would be the result of A)An increase in aggregate demand B)An increase in aggregate supply C)A decision by the Fed to purchase government securities by the FOMC D)A decision by the Fed to sell government securities by the FOMC E)A change in the stock market

Question

Quizplus · Accepted Answer

A shift from MS1 to MS2 indicates an increase in the money supply, which occurs when the Federal Reserve (Fed) decides to purchase government securities, thereby injecting more money into the economy.

The Following Questions Refer to the Graph Below