Refer to the diagram for the federal funds market. An expansionary monetary policy would be shown by:

A.  a shift from S f3 to S f2 .
B.  a shift from S f1 to S f3 .
C.  a rightward shift of D f .
D.  a leftward shift of D f .

ANSWER:

A.  a shift from S f3 to S f2 .