Refer to Figure 10-3. Which of the following is consistent with ...

[Shelles]

Refer to Figure 10-3. Which of the following is consistent with the graph depicted above?
 
  A) The government runs a budget deficit.
  B) An expected recession decreases the profitability of new investment.
  C) Taxes are changed so that real interest income is taxed rather than nominal interest income.
  D) Technological change increases the profitability of new investment.

Question 2

The Fed's policy tools include all the following except _______.
 
  A. required reserve ratio and open market operations
  B. quantitative easing
  C. discount rate
  D. taxing banks' deposits at the Fed

[duke02]

Answer to Question 1

C

Answer to Question 2

D Answer D is not a Fed policy tool.

[Shelles]

Thanks for the timely response, appreciate it

[mjenn52]

Gracias!