Answer :
'Given a recessionary gap, the Federal Reserve will use monetary policy to decrease interest rates and increase aggregate demand.
In macroeconomics, aggregate demand or domestic final demand is the aggregate demand for final goods and services in the economy at any given time. This is often called effective demand, but the term is sometimes differentiated. This is the demand for the Gross Domestic Product of the country.
Aggregate demand is a measure of aggregate demand for all goods and services produced in the economy. Aggregate demand is expressed as the total amount exchanged for those goods and services at a particular price level and point in time.
Aggregate demand, however, takes the sum of the markets for the individual products and services that the economy produces and expresses it as a total dollar value. For example, a country may have a total demand for goods and services of $1 billion annually.
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