With a large and growing deficit, the Fed may face pressure from ...

[MirandaLo]

With a large and growing deficit, the Fed may face pressure from the government to
 
  A) decrease the inflation tax.
  B) decrease the quantity of money to keep the value of money high.
  C) keep interest rates low, but the Fed risks inflation by doing so.
  D) increase the velocity of circulation.
  E) increase the quantity of money to prevent inflation.

Question 2

Producing an amount of GDP equal to potential GDP is most consistent with the economy producing
 
  A) either on or within the production possibilities frontier.
  B) on the production possibilities frontier.
  C) beyond the production possibilities frontier.
  D) either on or beyond the production possibilities frontier.
  E) within the production possibilities frontier.

[Beatricemm]

Answer to Question 1

C

Answer to Question 2

B

[MirandaLo]

TYSM

[shailee]

Excellent