The Federal Reserve can increase aggregate demand by ________.
A. selling government securities in the open market
B. reducing the discount rate
C. reducing the money supply
D. raising the reserve requirement
Answer: B
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If the Fed increases interest rates, other things remaining the same, foreigners demand ________ dollars, thereby ________ the exchange rate
A) more; decreasing B) fewer; increasing C) the same number of; not affecting D) fewer; decreasing E) more; increasing
Vertical integration can reduce transaction costs through all of the following ways except which one?
A) increasing the complexity of coordination B) decreasing the incentive for litigation C) decreasing search cost D) increasing information and control
Supply-side economics focuses on how fiscal policy might be used to
A. increase consumption. B. increase aggregate supply. C. increase aggregate demand to the full-employment level of real GDP. D. align aggregate demand and aggregate supply.
Discretionary fiscal policy designed to counteract a reduction in aggregate demand might include
A. an increase in the money stock. B. increased government infrastructure spending. C. a return to the gold standard. D. all of the options are correct.