Assume the reserve requirement is 16% and the MPC =0.75 for the economy when a stock market downturn reduces aggregate demand by $120 billion. nstructions: Enter your answers as a whole number. 3uppose the Federal Reserve wants to increase investment demand to offset the reduction in aggregate demand. To accomplish his goal, how much does investment demand need to increase? $ billion D. To increase investment demand by the desired amount, the Fed estimates that interest rates will need to by 4% and the money supply will need to by $150 billion. In order to achieve the $150 billion change in the money supply, the Fed will make an of $ billion.