Test: Test 3 This test: 40 point(s) possible This question: 1 point(s) possible The economy is at the equilibrium shown at point a in the figure. If the Fed Price level (GDP price index. 2005 = 100) Potential O A. sells government securities, the economy moves to an equilibrium at point c. 130 GDP O B. sells government securities, the economy moves to an equilibrium at point b. 120 O C. buys government securities, the economy moves to an equilibrium at point b. 110 O D. buys government securities, the economy moves to an equilibrium at point c. O E. None of the above are correct because the economy will remain at point a if the Fed buys or if the Fed 100 sells government securities 8 O 11.5 120 125 13.0 13.5 140 Real GDP (trillions of 2005 dollars) Time Remaining: 01:40:4 71.F Cloudy O Type here to search