To fight unemployment and close a recessionary gap, the Fed ______. A. Stimulates aggregate demand by lowering
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To fight unemployment and close a recessionary gap, the Fed ______.
A. Stimulates aggregate demand by lowering the federal funds rate, which increases the quantity of money
B. Stimulates aggregate supply by lowering the federal funds rate, which increases potential GDP
C. Increase employment, which increases real GDP
D. Increases bank reserves, which banks use to make new loans to businesses, which increases aggregate supply
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