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AP® Macroeconomics

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Business Cycle: Expansionary Period Policy

APMACR-X@YBTC

Created for Albert.io. Copyright 2016. All rights reserved.

If an economy with the business cycle shown above is currently operating at point D, which of the following policies would a central bank be most likely to enact?

A

The central bank would probably sell government bonds.

B

The central bank would probably lower the discount rate.

C

The central bank would probably buy government bonds.

D

The central bank would probably lower the required reserve ratio.

E

The central bank would probably print more money.