Suppose there is a decrease in aggregate demand. If the Fed wants to stabilize output it could

a. buy bonds. These purchases also move the price level closer to its original level.
b. buy bonds. However these purchases move the price level farther from its original level.
c. sell bonds. These sales also move the price level closer to its original level.
d. sell bonds. However these sales move the price level farther from its original level.


a

Economics

You might also like to view...

A sales tax creates a deadweight loss because

A) there is some paper work opportunity cost of sellers paying the sales tax. B) demand and supply both decrease. C) less is produced and consumed. D) citizens value government goods less than private goods. E) the government spends the tax revenue it collects.

Economics

Catherine is risk averse. When faced with a choice between a gamble and a certain level of wealth, she will

A) always prefer the gamble. B) always prefer the certain level of wealth. C) prefer the gamble if the expected utility from it is higher than the utility from the certain level of wealth. D) prefer the certain level of wealth if the expected utility from the gamble is higher than the utility of the certain level of wealth.

Economics

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

a. leftward shift in the demand curve for generic goods. b. downward movement along the demand curve for generic goods. c. rightward shift in the demand curve for generic goods. d. upward movement along the demand curve for generic goods.

Economics

Public choice theorists say that the greater the number of potential voters in an election, the __________ the perceived benefits of voting held by each voter, and so the __________ the likely percentage turnout of voters

A) greater; lower B) greater; higher C) smaller; lower D) smaller; higher

Economics