Author Question: The Federal Reserve influences the level of interest rates in the short run by changing the A) ... (Read 42 times)

nelaaney · **on:** Jun 30, 2018

The Federal Reserve influences the level of interest rates in the short run by changing the

A) demand for money through changes in reserve requirements.
B) supply of money through open market operations.
C) supply of money through changes in stock market operations.
D) demand for money through open market operations.

Question 2

Suppose an economy has a balanced federal budget, and a large increase in oil prices plunges the economy into a recession. Tax revenues will ________ and expenditures on transfer payments will ________, resulting in a budget ________.

A) increase; increase; surplus B) fall; increase; deficit
C) increase; fall; surplus D) fall; fall; deficit