Use the following graph to answer the next question. In the graphs, the numbers in parentheses near
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Use the following graph to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve, respectively. All numbers are in billions of dollars. The interest rate and the level of investment spending in the economy are at point C on the investment demand curve. To achieve the long-run goal of a noninflationary, full-employment output of Qf in the economy, the Fed should try to _____.
a. increase aggregate demand by increasing the interest rate
b. increase aggregate demand by decreasing the interest rate
c. make no change in the interest rate
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