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Place in order the events that occur in the short run when the Federal Reserve enacts expansionary monetary policy.


a. The increased borrowing leads to increased investment and purchasing of goods and services.

b. The aggregate demand curve shifts rightward.

c. Market equilibrium shifts toward more money being lent at a lower interest rate.

d. As the Fed buys bonds, new money enters the loanable funds market.

Respuesta :

juice7411
CEquilibrium shifts always more money being a lower

The order should be

1. As the fed buys bonds, new money enters the loanable funds market.

2. Market equilibrium shifts towards more money being lent at lower interest rates.  

3. The increased borrowing leads to increased investment and purchasing of goods and services

4. The aggregate demand curve shifts rightwards.

The following information should be considered:

  • In the case when the federal reserve should considered the expansionary monetary policy so it purchased the bonds from the open market.
  • The banking system liquidity should increased but the lending rate is decreased.
  • Now if the rate of interest is less so the spending in an investment should be increased.
  • Due to this, it trigerred the economic growth and the aggregrate demand curve should be shifted to the right.  

Learn more: brainly.com/question/6201432

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